After the termination or expiration of an Apricot Lane franchise agreement, is a franchisee prohibited from acting as a lender for a business that offers a similar assortment of merchandise to 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 Apricot Lane's 2025 Franchise Disclosure Document, a franchisee is restricted from acting as a lender to a similar business for a period of two years after the franchise agreement expires or terminates. Specifically, the franchisee cannot directly or indirectly 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 a business that offers or sells a similar assortment of merchandise to Apricot Lane's Specialty Stores.
This restriction applies within the former franchisee's territory, within a 10-mile radius of any other Apricot Lane Specialty Store (whether franchised or owned by the franchisor), or through e-commerce if such sales are substantially supported within the territory. Substantial support includes offices, administrative centers, communication centers, warehouses, distribution centers, and/or servers located within the territory.
The FDD specifies that this covenant is considered independent of other agreements and is deemed reasonably necessary to protect the Apricot Lane system. If any part of this covenant is deemed unenforceable, the franchisee is still bound by the maximum duty permitted by law. This post-term covenant aims to prevent franchisees from using the knowledge and resources gained during their franchise term to directly compete with Apricot Lane shortly after their agreement ends.