Can an Amerispec Inspection Services franchisee own a competing business during the term of the agreement?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
9.16 Obligation of Franchisee to Provide Plan for Other Businesses Franchisee Desires to Establish. If Franchisee, a principal of Franchisee, and/or an affiliate of Franchisee wishes to commence the operation of any additional business in addition to the business operated under the terms of this Agreement, Franchisee must provide the Company with a plan that describes in substantial detail how Franchisee will maintain the operation of the business authorized under this Agreement in accordance with its terms, while Franchisee, its principals, or its affiliates are simultaneously operating the additional business. Before commencing the operation of the additional business, Franchisee must obtain the Company's consent of the plan, which approval will not be unreasonably withheld. As conditions to approval of the plan the Company may require that, in addition to other reasonable conditions: (i) the additional business be kept completely separate from the business authorized under this Agreement (e.g. may not share the same location, building, or address); (ii) the additional business never be sold or transferred to another AmeriSpec franchisee; and (iii) the Company may require Franchisee and its principals and affiliates to divest themselves of the additional business if the Company
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 not outright prohibited from owning another business during the term of the franchise agreement. However, if a franchisee, a principal of the franchisee, or an affiliate of the franchisee wishes to start another business in addition to the Amerispec Inspection Services business, they must first provide Amerispec Inspection Services with a detailed plan. This plan must explain how the franchisee will maintain the operation of the Amerispec Inspection Services business in accordance with the franchise agreement while simultaneously operating the additional business.
Before starting the additional business, the franchisee must obtain Amerispec Inspection Services' consent to the plan, which will not be unreasonably withheld. Amerispec Inspection Services may require certain conditions for approval. These conditions may include keeping the additional business completely separate from the Amerispec Inspection Services business, such as not sharing the same location, building, or address. Additionally, the additional business cannot be sold or transferred to another Amerispec Inspection Services franchisee.
Amerispec Inspection Services may also require the franchisee, its principals, and affiliates to divest themselves of the additional business if the company determines it is necessary. This provision ensures that franchisees remain focused on their Amerispec Inspection Services franchise and do not engage in activities that could harm the brand or its reputation. This is a fairly standard clause in franchise agreements, designed to protect the franchisor's brand and ensure franchisee commitment.