Following termination or expiration of a Benjamin Franklin Plumbing franchise agreement, what post-term restrictions on competition must a franchisee comply with, as outlined in Sections 14.2 and 14.3?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
rmation that we designate as confidential will be deemed to be Confidential Information for purposes of this Agreement.
- 13.2. Individuals Affiliated with the Franchised Business. At our request, the Owners, Key Person, and any employees we designate are required to sign a separate Confidentiality and Non-Compete Agreement in the form of Appendix C to this Agreement. At our request, you are required to use best efforts to obtain signed confidentiality agreements from your landlord, contractors, and any other person outside of your organization to whom you wish to disclose any of our Confidential Information. The confidentiality agreements are required to be in a form satisfactory to us and identify us as a third-party beneficiary with the independent right to enforce the agreement.
- 13.3. Improvements. You may not introduce any Improvement into the Franchised Business without our prior written consent. Any Improvement developed by you or any Owner, employee or agent of Franchisee is the property of Franchisor. At our request, you are required to provide us with information about the Improvement and sign any documents necessary to verify assignment of the Improvement to us, without compensation. We will have the right to use, disclose, and/or license the Improvement for use by others.
14. RESTRICTIONS ON COMPETITION
14.1. During the Term. The relationship established by this Agreement will provide access to valuable Confidential Information, training, and business opportunities that you and the Owners did not possess before entering into this Agreement. Accordingly, while this Agreement is in effect, except as we otherwise approve in writing, you may not, either directly or indirectly:
14.1.1 Own, maintain, operate, engage in, invest in, be employed by, provide any assistance to, or have any interest in any "Competing Business," as defined in the Brand Appendix; or
14.1.2 Appropriate or duplicate any part of the System for a purpose other than to operate the Franchised Business, or divert or attempt to divert any present or prospective business or customer to any Competing Business, or do anything else harmful to the goodwill associated with the Marks and the System.
14.2. After Expiration, Termination or Transfer. You agree that you will not, for a period of two (2) years commencing on the date of: (a) a transfer permitted under Section 15 of this Agreement; (b) expiration of this Agreement; (c) termination of this Agreement (regardless of the cause for termination); or (d) a final arbitration or court order (after all appeals have been taken) with respect to enforcement of this Section 14.2 to the extent such order is later than the respective foregoing event:
14.2.1 Own, maintain, operate, engage in, invest in, be employed by, provide assistance to, or have any interest in any Competing Business that is located in or serves customers within (i) the Territory, (ii) forty (40) miles of the Territory, (iii) any zip code where Franchisee's Franchised Business served customers during the term, (iv) the territory of any other then-existing Franchised Businesses plus the area formed by extending the boundaries of that territory ten (10) miles in all directions, or (v) the territory serviced by any business operated by Franchisor, its affiliates or their licensees under the Marks at such time plus the area formed by extending the boundaries of that territory ten (10) miles in all directions;
Source: Item 23 — RECEIPTS (FDD pages 88–312)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, after the expiration, termination, or transfer of the franchise agreement, franchisees are subject to certain restrictions on competition for a period of two years. These restrictions begin from the date of a permitted transfer under Section 15 of the agreement, the expiration date, the termination date (regardless of the reason), or a final arbitration or court order related to the enforcement of Section 14.2, whichever is later.
Benjamin Franklin Plumbing emphasizes the importance of these restrictions, stating that violating Section 14 would cause irreparable harm, potentially leading to injunctive relief in addition to other available remedies. The agreement clarifies that franchisees cannot bypass these restrictions by engaging in prohibited activities indirectly through another person or entity. The time period for these restrictions can be extended if the franchisee breaches Section 14, pausing until compliance resumes.
The FDD also states that any claims a franchisee may have against Benjamin Franklin Plumbing do not serve as a defense against the enforcement of these restrictions. Benjamin Franklin Plumbing asserts that franchisees possess general skills and abilities that allow them other employment opportunities, ensuring that these restrictions do not deprive them of their ability to earn a living. However, Benjamin Franklin Plumbing retains the right to reduce the scope of any restriction in Section 14 with immediate effect by providing written notice to the franchisee.