After termination, can an All Team franchisee loan money to a similar business?
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.
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 certain activities after the termination, expiration, or transfer of the Franchise Agreement. For a period of two years, the franchisee cannot, without All Team's prior written consent, directly or indirectly be involved with a similar business. This includes performing services for, engaging in, acquiring, being an employee of, having a financial interest in, leasing property to, or loaning money to a similar business.
The restriction applies within the area of the agency and any other All Team agency, whether operated by All Team, its affiliates, licensees, or other franchisees. This non-compete clause prevents a former franchisee from using the knowledge and resources gained during their time with All Team to support a competing venture.
This post-termination restriction is a standard practice in franchising to protect the brand's market share and confidential information. It ensures that former franchisees do not directly compete with the All Team system within a defined period and geographic area, safeguarding the interests of the franchisor and remaining franchisees.