Is an All Team franchisee prohibited from being an employee of a similar business after termination?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Non-Competition After Termination. For two (2) years after the termination, expiration or Transfer of this Agreement for any reason, unless FRANCHISEE has the prior written consent of ATFC:
FRANCHISEE will not directly or indirectly, through itself or through corporations, partnerships, trusts, associations, joint ventures, limited liability companies, or other entities or otherwise, perform any services for, engage in or acquire, be an employee of, have any financial interest in, loan money to, lease property to, or have any interest based on profits or revenues of any Similar Business. The geographical scope of this restriction shall cover the Area of the Agency and the area of any other ATFC agency, whether such agency is operated by ATFC, an affiliate of ATFC, a licensee of ATFC, or a franchisee of ATFC.
FRANCHISEE will not, directly or indirectly, on its own behalf or on the behalf of others, solicit or service for, or divert or appropriate to any Similar Business, or attempt to solicit, divert or appropriate to or from any Similar Business, any person or entity which is or was at any time during the preceding two (2) year period a customer of FRANCHISEE, ATFC or any affiliate or licensee or franchisee of ATFC.
FRANCHISEE will not, either directly or indirectly, on its own behalf or on the behalf of others, solicit, divert or hire away, or attempt to solicit, divert or hire away, to any Similar Business any person employed by ATFC or its affiliates or licensees, nor will FRANCHISEE solicit, divert or hire away or attempt to solicit, divert or hire away to the Agency or any Similar Business any such employee of any licensee or franchisee of ATFC without the prior written consent of such licensee or franchisee of ATFC.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, a franchisee is restricted from being an employee of a similar business for a period of two years after the termination, expiration, or transfer of the Franchise Agreement. This restriction applies unless the franchisee obtains prior written consent from All Team Franchise Corporation (ATFC).
Specifically, the franchisee cannot directly or indirectly perform services for, engage in, or acquire, be an employee of, have any financial interest in, loan money to, lease property to, or have any interest based on profits or revenues of any similar business. This geographical restriction covers the area of the agency and any other All Team agency, whether operated by ATFC, its affiliates, licensees, or other franchisees.
This non-compete clause is intended to protect All Team's legitimate business interests by preventing former franchisees from using the knowledge, know-how, and expertise gained during their franchise term to compete against the All Team system. However, the FDD also states that All Team intends to restrict the franchisee's activities only to the extent necessary for the protection of its business interests, and the covenants are to be interpreted and applied consistent with reasonableness and equity. A court can reduce the scope of the restrictions if they are deemed too broad, and All Team also has the right to reduce the scope of any covenant without the franchisee's consent.