After the Amerispec Inspection Services agreement terminates, for how long does the post-term non-compete covenant last?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
3.1 of this Agreement; provided, however, that this provision shall not apply to any ownership of the Franchisee of less than 1% of the outstanding equity securities of any publicly held corporation.
- 15.3 Post-Term Covenant Not to Compete. The Franchisee covenants that for a period of 1 year after the later of the following terminating events: (i) any transfer, repurchase or termination of this Agreement; (ii) the expiration of this Agreement (if a successor franchise or renewal term is not granted); (iii) the date on which the Franchisee stops operating a competitive business (including continued operation of the Franchised Business whether or not operated under the Names and Marks) or (iv) the last date of the use of the Names and Marks and/or System of Operation, the Franchisee shall not, either directly or indirectly, for itself or through, on behalf of, or in conjunction with any other person, persons, partnership, corporation, or other entity do or engage in any act proscribed by Paragraph 15.2 of this Agreement, except that the restrictions contained in Paragraph 15.2.2 of this Agreement, shall be limited during the post term period to within the Territory described in Paragraph 3.1 of this Agreement and a 75-mile radius thereof.
- 15.4 Independent Covenants. The parties agree that each of the covenants contained in Paragraphs 15.2 and 15.3 shall be construed as independent of any other covenant or provision of this Agreement.
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to the 2025 Amerispec Inspection Services Franchise Disclosure Document, a franchisee is subject to a post-term non-compete covenant for a period of 1 year after the termination of the franchise agreement. This restriction begins after the latest of several events: any transfer, repurchase, or termination of the agreement; the expiration of the agreement if a successor franchise or renewal is not granted; the date the franchisee stops operating a competitive business; or the last date of the use of the Amerispec Inspection Services's names and marks and/or system of operation.
During this one-year period, the franchisee is prohibited from engaging in any activity proscribed by Paragraph 15.2 of the agreement. The restrictions outlined in Paragraph 15.2.2 are limited to the territory described in Paragraph 3.1 of the agreement and a 75-mile radius around it.
Amerispec Inspection Services also retains the right to reduce the scope of the non-compete covenant at its discretion, effective immediately upon written notice to the franchisee. The franchisee is obligated to comply with any such modifications. This means that while the standard non-compete lasts for one year, Amerispec Inspection Services can shorten it, providing some flexibility.