Is an Apricot Lane franchisee allowed to divert business from their franchised business to a competitor?
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
(d) Without the Franchisor's express written permission, which may be granted or denied in the Franchisor's sole discretion, become an exclusive distributor for any third-party vendor or obtain exclusive distribution rights for any non-APRICOT LANE Products.
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- Post-Termination Covenant Not to Compete. Upon termination or expiration of the Franchise Agreement for any reason, or termination of Associate's employment with Franchisee, Associate agrees that, for a period of two (2) years commencing on the effective date of termination or expiration of the Franchise Agreement, or termination of Associate's employment with Franchisee, or the date on which Associate or the Franchisee, ceases to conduct business, whichever is later, the Associate will not have any direct or indirect interest (through any immediate family member of Associate or its owners or otherwise)
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to the 2025 Apricot Lane Franchise Disclosure Document, franchisees are explicitly prohibited from diverting business to a competitor during the term and renewal term of their Franchise Agreement. This restriction includes not only direct attempts to redirect customers or accounts but also extends to preventing the recruitment of Apricot Lane's or another franchisee's employees to a competitive business.
Specifically, an Apricot Lane franchisee cannot hold a 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. This is designed to protect the Apricot Lane brand and its franchisees from unfair competition and to ensure that franchisees remain fully committed to their Apricot Lane business.
Furthermore, even after the termination or expiration of the Franchise Agreement, a franchisee is subject to a post-termination covenant not to compete for a period of two years. This prevents them from engaging in any competitive business within that timeframe, ensuring continued protection for Apricot Lane's market position and confidential information. This non-compete extends to immediate family members of the franchisee as well.