Is the Franchisee allowed to engage in other business activities that conflict with their obligations under the All States M.E.D. Franchise Agreement?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
hisee, regardless of the reason or reasons for termination, and whether such termination is voluntary or involuntary, and Franchisee is entitled to communicate Individual's obligations under this Agreement to any future customer or employer to the extent deemed necessary by Franchisee for protection of its rights hereunder and regardless of whether Individual or any of its affiliates or assigns becomes an investor, partner, joint venturer, broker, distributor or the like in an All States M.E.D. Business.
3. Non-Competition
- a) During the term of Individual's relationship with Franchisee and for a period of two (2) years after the expiration or termination of Individual's relationship with Franchisee, regardless of the cause of expiration or termination, Individual shall not, directly or indirectly, divert or attempt to divert any business or customer of Franchisee or the Company to any Competitive Business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Company's service mark "All States M.E.D." and such other trade names, trademarks, service marks, trade dress, designs, graphics, logos, emblems, insignia, fascia, slogans, drawings and other commercial symbols as the Company designates to be used in connection with All States M.E.D. or the Company's uniform standards, methods, procedures and specifications for the establishment and operation of an All States M.E.D. business.
- b) During the term of Individual's relationship with Franchisee and for a period of two (2) years thereafter, regardless of the cause of termination, Individual shall not, directly or indirectly, offer Competitive Business services anywhere within a TWENTY FIVE (25) mile radius of any All States M.E.D. location without the express written consent of Franchisee and the Company.
All States M.E.D. Franchise Agreement Schedule 2: Nondisclosure and Non-Compete Agreement
c) During the term of Individual's relationship with Franchisee and for a period of two (2) years thereafter, regardless of the cause of termination, Individual shall not, directly or indirectly, solicit or otherwise attempt to induce or influence any business associate of Franchisee, Company or any other All States M.E.D. Business to compete against, or terminate or modify his, her or its business relationship with, Franchisee, Company or any other All States M.E.D. Business.
**4.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to the 2024 All States M.E.D. Franchise Disclosure Document, a franchisee's ability to engage in other business activities is restricted by a non-compete agreement. The agreement states that during the term of the individual's relationship with the franchisee, and for two years after, the individual cannot divert business or customers to a Competitive Business. This includes actions that could harm the goodwill associated with the "All States M.E.D." service mark.
This non-compete extends to offering Competitive Business services within a 25-mile radius of any All States M.E.D. location, unless express written consent is obtained from both the franchisee and the company. Additionally, the individual is prohibited from soliciting or influencing any business associate of the franchisee, the company, or any other All States M.E.D. Business to compete against or terminate their relationship with the All States M.E.D. business.
In the context of the agreement, a "Competitive Business" is defined as any business offering services similar to those provided by All States M.E.D. businesses, or any business where Trade Secrets or Confidential Information could be used to the disadvantage of All States M.E.D., its affiliates, or its other franchisees. However, this definition excludes any business operated by the franchisee under a Franchise Agreement with All States M.E.D., or any business operated by a publicly-held entity in which the franchisee owns less than a 5% legal or beneficial interest. This clause aims to protect All States M.E.D.'s market position and confidential information by preventing franchisees and related individuals from directly competing with the franchise during and for a period after the franchise agreement.