After the All States M.E.D. franchise agreement expires or terminates, for how long are franchisees restricted from engaging in competitive business activities?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
h the Marks in any regular, classified or other telephone directory listing and shall authorize transfer of same to or at the direction of Franchisor; and
- (h) comply with all other applicable provisions of this Agreement.
17.2 Post-Termination Covenant Not to Compete
- 17.2.1 Franchisee acknowledges that the restrictive covenants contained in this Section and in Section 17 are fair and reasonable.
- 17.2.2 Except as otherwise approved in writing by Franchisor, neither Franchisee, nor any holder of a legal or beneficial interest in Franchisee, nor any officer, director, executive, manager or member of the professional staff of Franchisee, shall, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly:
- (a) offer Competitive Business services located or operating (a) at or within a ninety (90) mile radius of the Franchised Business, or (b) within a ninety (90) mile radius of any other All States M.E.D. Business in existence at the time of termination or expiration, or (c) any other business owned or operated by the Franchisor in existence at the time of termination or expiration;
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, franchisees face post-termination restrictions on competitive business activities for a period of two years after the franchise agreement expires or terminates, regardless of the reason for termination.
This non-compete agreement prevents former All States M.E.D. franchisees, holders of legal or beneficial interest, officers, directors, executives, managers, or professional staff members from offering competitive business services within a 90-mile radius of the franchised business. This restriction also applies to any other All States M.E.D. business or any business owned or operated by the franchisor that exists at the time of termination or expiration.
Additionally, former franchisees are prohibited from soliciting or attempting to influence any customer or business associate of All States M.E.D. to terminate or modify their relationship with the franchisor or to compete against them. All States M.E.D. retains the right to require certain individuals to sign standard non-disclosure and non-competition agreements.
These restrictions are acknowledged by All States M.E.D. as fair and reasonable, aiming to protect the franchisor's business interests and maintain the integrity of the All States M.E.D. system. Prospective franchisees should carefully consider these post-termination obligations and their potential impact on future business ventures.