Does the All County covenant not to compete prevent my owners from being investors in a competitive business?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
hat we prescribe from time to time to prevent unauthorized use or disclosure of confidential information, including, without limitation, restrictions on disclosure to the Business' personnel and others.
- 15.3. Ideas, Concepts, Techniques or Materials. All ideas, concepts, techniques or materials relating to an ALL COUNTY® business, whether or not constituting protected intellectual property, and whether created by or on behalf of you or your owners, will be promptly disclosed to us, deemed to be our sole and exclusive property and part of the System and deemed to be works made for hire for us. You and your owners agree to sign whatever assignment or other documents we may request from time to time to evidence our ownership or to assist us in securing intellectual property rights in such ideas, concepts, techniques or materials.
16. EXCLUSIVE RELATIONSHIP.
- 16.1. Exclusive Dealings. We have granted the Franchise to you in consideration of and reliance upon your agreement to deal exclusively with us and not to be involved with a Competitive Business. **"**Competitive Business" means any business that offers real estate property management services or products or other services that are the same or similar to those offered by ALL COUNTY® businesses, or any business that offers franchises or licenses to others to operate any business that offers real estate property management services or products or other services that are the same or similar to those offered by ALL COUNTY® businesses. You agree that during the Term of this Agreement neither you nor any of your owners including any of your or your owners' spouses, children or other first degree relatives by blood or marriage will not engage in any of the following:
- 16.1.1. Interest or Involvement. You will not have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business, wherever located.
- 16.1.2.
Source: Item 23 — Receipts (FDD pages 43–157)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, both during the term of the franchise agreement and after termination or expiration, there are restrictions regarding involvement with competitive businesses. During the term of the agreement, neither the franchisee nor any of their owners (including spouses, children, or first-degree relatives) can have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business, regardless of its location. A "Competitive Business" is defined as any business offering real estate property management services or similar services to those offered by All County.
Post-termination or expiration of the franchise agreement, a covenant not to compete applies for 36 months. During this period, neither the franchisee nor their owners can have any direct or indirect interest as a disclosed or beneficial owner, investor, partner, director, officer, or employee in a management or sales capacity, consultant, representative, or agent in any Competitive Business. This restriction applies within the franchisee's territory or within 50 miles of any point on the outer perimeter of their territory.
These non-compete clauses are fairly standard in franchising to protect the brand and system. The restrictions during the term are very broad, essentially preventing any ownership in a competing business by the franchisee or their immediate family. The post-term restrictions are more limited geographically but still prevent a wide range of involvements. A prospective franchisee should carefully consider these restrictions and how they might impact other business interests or family members' activities. All County also retains the right to seek a court order to enforce the non-compete agreement, potentially extending the restriction period if legal action is necessary.