Is an Apricot Lane Associate allowed to divert business from the Franchised Business to a Competitive Business during the Franchise Agreement term?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
Associate therefore agrees that other than the Franchise Business licensed under a Franchise Agreement, the Associate, will not during the Term and renewal Term of the Franchise Agreement:
(a) Have any direct or indirect controlling interest as a disclosed or beneficial owner in a Competitive Business; or
(b) Perform services as a director, partner, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business; or
(c) Divert or attempt to divert any business related to, or any customer or account of the Franchised Business, the Franchisor's business, the business of any affiliate of the Franchisor or any other franchisee's business, by direct inducement or otherwise, or divert or attempt to divert the employment of any employee of Franchisor or another franchisee licensed by Franchisor, to any Competitive Business by any direct inducement or otherwise; or
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to the 2025 Apricot Lane Franchise Disclosure Document, an Associate is prohibited from diverting business from the Franchised Business to a Competitive Business during the term and renewal term of the Franchise Agreement. This restriction is part of the agreement the Associate makes with Apricot Lane.
The agreement specifies that an Associate cannot have any direct or indirect controlling interest in a Competitive Business, nor can they perform services for one as a director, partner, officer, manager, employee, consultant, representative, or agent. Furthermore, the Associate is prohibited from diverting or attempting to divert any business, customer, or account of the Franchised Business, the Franchisor, its affiliates, or any other franchisee to a Competitive Business. They also cannot attempt to divert the employment of any employee of Apricot Lane or another franchisee to a Competitive Business.
This non-diversion clause is a standard protective measure in franchising. It ensures that individuals associated with an Apricot Lane franchise are fully committed to its success and do not use their position to benefit a competing business. The definition of "Competitive Business" is important for Associates to understand, as it defines the scope of prohibited activities. This helps protect Apricot Lane's market position and the investment of its franchisees by preventing conflicts of interest and unfair competition from those affiliated with the brand.