What are the in-term noncompetition covenants that Apricot Lane franchisees are subject to, as described in Section 17?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE covenants that during the term of this Agreement and any renewal thereof, except as otherwise approved in writing by FRANCHISOR, FRANCHISEE shall not, either directly or indirectly, for itself/himself/herself, or through, on behalf of, or in conjunction with any person, persons, partnership, or corporation:
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- Divert or attempt to divert any business or customer of the Franchised Business to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System, unless specifically approved in writing by FRANCHISOR.
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- Own, maintain, engage in, provide advice, management or consulting services to, provide any resources or contacts to, act as a lender for, provide assets to or have any interest in any business (including any business operated by FRANCHISEE prior to entry into this Agreement) that sells through any channel of distribution of any of the types of merchandise that are the same as or similar to the types of merchandise being sold through the Specialty Stores, unless granted prior approval in writing by FRANCHISOR.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to the 2025 Apricot Lane Franchise Disclosure Document, Section 17 outlines the noncompetition covenants that franchisees must adhere to during the term of their Franchise Agreement. These covenants restrict franchisees from engaging in activities that could harm the Apricot Lane brand or divert business away from the franchised location.
Specifically, franchisees are prohibited from diverting or attempting to divert any business or customer of the Franchised Business to any competitor. They also cannot perform any act that is injurious or prejudicial to the goodwill associated with the Apricot Lane Marks and the System, unless they receive specific written approval from Apricot Lane.
Furthermore, franchisees are restricted from owning, maintaining, engaging in, providing advice, management, or consulting services to, providing resources or contacts to, acting as a lender for, providing assets to, or having any interest in any business that sells similar merchandise through any channel of distribution as the Apricot Lane Specialty Stores. This restriction applies to any business operated by the franchisee prior to entering into the Franchise Agreement, unless prior written approval is granted by Apricot Lane. These in-term covenants are designed to protect Apricot Lane's market position and prevent franchisees from using the franchisor's resources and knowledge to benefit competing businesses during the term of the agreement.