Does the non-competition clause in the All Team franchise agreement apply after termination, expiration, or transfer of the agreement?
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, the franchise agreement includes a non-competition clause that applies for a period of two years after the termination, expiration, or transfer of the agreement. This restriction prevents a franchisee from engaging in any Similar Business within the area of their former All Team agency, as well as the area of any other All Team agency, regardless of whether it's operated by All Team, an affiliate, a licensee, or another franchisee.
Specifically, the franchisee is prohibited from providing services to, engaging in, acquiring, being employed by, having a financial interest in, loaning money to, leasing property to, or having any interest based on profits or revenues of any Similar Business. Additionally, the franchisee cannot solicit or service customers of All Team or its affiliates, licensees, or franchisees, nor can they solicit or hire away employees of All Team or its affiliates or licensees.
This post-termination non-compete is a standard practice in franchising to protect the brand's confidential information, customer relationships, and market share. The definition of "Similar Business" is subject to change as the business of the All Team agency evolves, so the definition in effect at the time the provision is applied will govern. A prospective franchisee should carefully consider the scope and duration of this non-compete and how it might impact their future career options should they decide to leave the All Team system.