What are the post-term noncompetition covenants that Apricot Lane franchisees are subject to, as described in Section 17?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Post-Term Covenants
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- FRANCHISEE specifically acknowledges that, pursuant to this Agreement, FRANCHISEE will receive valuable training, resources, contacts and Confidential Information, including, without limitation, information regarding the promotional, operational, sales and marketing methods and techniques of FRANCHISOR and the System. For a period of two (2) years after expiration of or after termination of this Agreement for any reason, 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, own, maintain, engage in, provide management, resources, contacts, vendors or consulting services to, act as a lender for, provide assets to, or have any interest in any business that offers or sells, in any channel of distribution, an assortment of merchandise that is similar to the assortment of merchandise then being carried in the Specialty Stores unless granted prior approval in writing by FRANCHISOR:
- a. Within the Territory;
- b. Within a radius of ten (10) miles of the location of any other Specialty Store, whether franchised or owned by FRANCHISOR; or
- c. Though e-commence where such sales are substantially supported within the Territory (including, but not limited to, support provided by offices, administrative centers, communication centers, warehouses, distribution centers and/or servers located within the Territory).
C. Enforceability of Covenants
Each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement. FRANCHISEE acknowledges and agrees that each restriction in this Section 17 is reasonably necessary to protect and preserve the System. If all or any portion of a covenant in Section 17 is held unreasonable or unenforceable by a court or agency having valid jurisdiction in an unappealed final decision to which FRANCHISOR is a party, FRANCHISEE shall be bound by any lessor covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and made a part of Section 17.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to the 2025 Apricot Lane FDD, Section 17 outlines the post-term non-competition covenants that franchisees must adhere to after the termination or expiration of their franchise agreement. For a period of two years following the termination or expiration of the agreement, a franchisee is restricted from engaging in any business that offers or sells a similar assortment of merchandise to that of Apricot Lane's Specialty Stores. This restriction applies regardless of the reason for termination.
The non-compete restrictions apply within specific geographic boundaries. These boundaries include the franchisee's original territory, an area within a 10-mile radius of any other Apricot Lane store (whether franchised or company-owned), and through e-commerce activities that are substantially supported within the franchisee's territory. Substantial support includes offices, administrative centers, communication centers, warehouses, distribution centers, and servers located within the territory.
These covenants are designed to protect Apricot Lane's confidential information, training, resources, contacts, and operational methods. The FDD states that these restrictions are deemed reasonably necessary to protect and preserve the Apricot Lane system. If any part of the non-compete agreement is deemed unenforceable by a court, the franchisee is still bound by the maximum duty permitted by law, ensuring some level of non-competition is maintained.