Under what conditions is an Apricot Lane Associate permitted to own 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 permitted to own securities in a Competitive Business under specific conditions. A "Competitive Business" is defined as any business that derives 10% or more of its gross revenue from providing retail store products and services similar to those offered by Apricot Lane franchises.
However, this restriction does not apply if the securities are listed on a stock exchange or traded on the over-the-counter market. In such cases, an Associate can own these securities, provided that the aggregate ownership represents 5% or less of that class of securities issued and outstanding.
This exception allows Apricot Lane Associates to invest in publicly traded companies that may be considered competitive to Apricot Lane, as long as the investment remains a small percentage of the company's overall ownership. This clause balances the franchisor's need to protect its business interests with the Associate's ability to make personal investments.