After the association with 1 800 Packouts ends, what is the geographic scope of the non-compete agreement?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
- **5.
Noncompete After Association Ends.** For two years after your association with us ends for any reason, you may not, without our prior written consent:
(a) directly or indirectly own, manage, engage in, be employed by, advise, make loans to, or have any other interest in any Competitive Business located within or serving customers that are located within (i) the territory specified on Exhibit A or any territory of another Franchised Business, (ii) a 50-mile radius from the borders of the territory specified on Exhibit A, or (iii) a 50-mile radius from any 1-800- PACKOUTS storage facility operated by Franchisor or its affiliates; or
(b) solicit for employment any person who at any time within the immediate past 12 months has been employed by us, Franchisor or its affiliates, or by any of Franchisor's franchisees.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 FDD, after the franchise relationship with 1 800 Packouts ends, the franchisee is subject to a non-compete agreement for two years. This agreement restricts the franchisee from engaging in any Competitive Business within specific geographic areas without prior written consent from 1 800 Packouts.
The geographic scope includes (i) the territory specified on Exhibit A or any territory of another Franchised Business, (ii) a 50-mile radius from the borders of the territory specified on Exhibit A, or (iii) a 50-mile radius from any 1-800-PACKOUTS storage facility operated by the franchisor or its affiliates. This means a former franchisee cannot own, manage, be employed by, advise, make loans to, or have any interest in a competitive business within their original territory, other franchisees' territories, or within 50 miles of either the franchisee's territory or any 1 800 Packouts storage facility.
Additionally, the franchisee is prohibited from soliciting for employment any person who has been employed by 1 800 Packouts, its affiliates, or its franchisees within the 12 months before the end of the franchise relationship. This restriction on soliciting employees extends beyond the geographic limitations applied to competitive businesses, aiming to protect 1 800 Packouts' workforce and maintain stability within the franchise system.