Upon termination or non-renewal of the All County franchise agreement, is the franchisee required to adhere to the covenant not to compete?

According to All County's 2025 Franchise Disclosure Document, franchisees are required to adhere to a covenant not to compete after the termination or expiration of the Franchise Agreement. Specifically, a franchisee may not operate a similar type of business for a period of 36 months. This restriction applies within the franchisee's territory or within 50 miles from the outside perimeter of their territory.

This non-compete obligation has significant implications for a franchisee considering leaving the All County system. It restricts their ability to immediately start a competing business or work for a competitor in the same geographic area. The 36-month duration is a substantial period, potentially requiring a former franchisee to relocate, change industries, or wait out the term before re-entering the property management sector in their original territory.

It is important to note that the enforceability of non-compete agreements can vary by state. For example, the FDD includes an addendum for California franchisees noting that the covenant not to compete extending beyond the term of the franchise may not be enforceable under California law. Prospective franchisees should consult with legal counsel to understand the specific enforceability of the non-compete agreement in their state and to assess the potential impact on their future business endeavors.

Therefore, potential All County franchisees should carefully consider the terms of the non-compete agreement and its potential impact on their future career options. They should also be aware of any state-specific laws that may affect the enforceability of the agreement.