Under what condition is an Apricot Lane Associate NOT prohibited from owning securities in a Competitive Business?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) "Competitive Business" as used in this Agreement means any business offering, or granting franchises or licenses to others to offer a business that receives 10% or more of its gross revenue by providing retail store products and services offered by Franchise Businesses; provided, however, Associate will not be prohibited from owning securities in a Competitive Business if such securities are listed on a stock exchange or traded on the over-the-counter market and represent in the aggregate 5% or less of that class of securities issued and outstanding.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, an associate is generally restricted from having an interest in a Competitive Business. A Competitive Business is defined as any business that derives 10% or more of its gross revenue from retail store products and services similar to those offered by Apricot Lane franchises.
However, there is an exception to this restriction. An Apricot Lane associate is not prohibited from owning securities in a Competitive Business if those securities are listed on a stock exchange or traded on the over-the-counter market. Furthermore, the associate's ownership in such securities must represent 5% or less of the total outstanding shares of that class of securities.
This exception allows associates to invest in publicly traded companies that may be considered Competitive Businesses, provided that the investment is relatively small and does not represent a significant ownership stake. This clause balances the franchisor's need to protect its business interests with the associate's ability to make personal investments.