Can the definition of 'Similar Business' change during the term of the All Team Franchise Agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
At the time that this Agreement is signed, a "Similar Business" is one which provides temporary and permanent staffing in the following areas: healthcare and environmental, hospitality and food service, management recruiting, labor and light industrial and administrative and clerical. However, as noted in Section XV, the business of the Agency is subject to change, and a "Similar Business" shall be interpreted at the time that the applicable provision is effective.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the definition of 'Similar Business' can change during the term of the Franchise Agreement. The document states that at the time the agreement is signed, a 'Similar Business' is defined as one providing temporary and permanent staffing in healthcare and environmental, hospitality and food service, management recruiting, labor and light industrial, and administrative and clerical areas.
However, the FDD also notes that the business of the All Team agency is subject to change, and therefore, the definition of 'Similar Business' will be interpreted at the time the applicable provision regarding non-competition is effective. This means that what constitutes a 'Similar Business' could evolve as All Team's business evolves.
For a prospective franchisee, this implies that the scope of the non-compete clause could broaden over time, potentially restricting their ability to engage in businesses that might not initially be considered competitive. It is important for franchisees to stay informed about any changes to All Team's core business and how those changes might affect the definition of 'Similar Business' and, consequently, the restrictions on their activities during the term of the agreement.