After the 1 800 Packouts franchise is terminated or expires, for how long are the non-competition covenants in effect?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| owners have signed a non-competition covenant in favor of us; you and your transferring owners have agreed that you will not identify as a current or former Franchised Business or franchisee, and use any Mark or other indicia of a Franchised Business; and we were properly offered the opportunity to exercise our right of first refusal and we declined to exercise it. | |||
| n. | Franchisor's right of 13B first refusal to acquire franchisee's business | 14.G | We have 30 days to match any offer. |
| o. | Franchisor's option 14B to purchase franchisee's business | Not Applicable | Not Applicable. |
| p. | Death or disability of 15B franchisee | 14.E | Executor, administrator, conservator, or other personal representative must transfer interest of franchisee or principal owner within 6 months. All transfers are subject to provisions in the Franchise Agreement regulating transfers. |
| q. | Non-competition 16B covenants during the term of the franchise | 7.A | Neither you nor your owners, without our prior written approval, may: have any interest, direct or indirect, in any other business offering or providing services or products competitive with or similar to the services or products offered or provided by Franchised Businesses or any business which franchises or licenses others to offer or provide such services or products (each, a "Competitive Business"); do acts injurious to our goodwill; use vendor relationships established through your associations with us for any other purpose besides the operation of your Franchised Business; or solicit for employment individuals employed during the past 12 months by us, our affiliates, or our franchisees. |
| r. | Non-competition 17B covenants after the franchise is terminated or expires | 7.B and 16.D | Subject to applicable state law, for two years after the expiration of termination of your Franchise Agreement, you and your Owners may not (i) be involved in any Competitive Business that is located or operating within Your Territory or the territory of another Franchised Business or within a 50-mile radius from the borders of Your Territory, or within a 50-mile radius of a Facility operated by us or our affiliates or (ii) solicit for employment individuals |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 49–53)
What This Means (2025 FDD)
According to the 2025 FDD, the non-competition covenants for 1 800 Packouts are in effect for a period of two years after the expiration or termination of the Franchise Agreement. During this time, franchisees and their owners are restricted from involvement in any Competitive Business.
This restriction applies to businesses located or operating within the franchisee's territory, the territory of another 1 800 Packouts franchise, or within a 50-mile radius from the borders of the franchisee's territory. It also includes a 50-mile radius of any facility operated by 1 800 Packouts or its affiliates. Additionally, franchisees are prohibited from soliciting for employment any individuals employed during the past 12 months by 1 800 Packouts, its affiliates, or its franchisees.
These non-competition terms are subject to applicable state laws, which may modify or limit their enforceability. Prospective franchisees should be aware of these restrictions as they significantly impact their ability to engage in similar business ventures after leaving the 1 800 Packouts system. It is advisable to seek legal counsel to understand the specific implications and enforceability of these covenants in their respective state.