After the termination or expiration of an Apricot Lane franchise agreement, can a franchisee own a business with a similar assortment of merchandise within the territory if they obtain prior written approval from Apricot Lane?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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).
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to the 2025 Apricot Lane Franchise Disclosure Document, a franchisee is restricted from engaging in a similar business after the termination or expiration of their franchise agreement. Specifically, for a period of two years following the termination or expiration, the franchisee cannot own, maintain, or be involved with a business that offers a similar assortment of merchandise to Apricot Lane stores. This restriction applies within the franchisee's territory, within a 10-mile radius of any other Apricot Lane store, or through e-commerce if sales are substantially supported within the territory.
However, there is an exception to this restriction. A former franchisee can engage in a similar business within these restricted areas if they obtain prior written approval from Apricot Lane. This approval is necessary to proceed with such a venture without violating the terms of the franchise agreement.
This clause protects Apricot Lane's market position and confidential business information. The requirement for written approval gives Apricot Lane control over potential competition from former franchisees, ensuring that they do not directly leverage the brand's resources and knowledge against the franchise system. Prospective franchisees should carefully consider these post-term covenants and their implications for future business opportunities.