Are non-competition covenants applicable after the franchise is terminated or expires for C3 Wellness Spa Multi-Unit Development Agreements?

According to C3 Wellness Spa's 2024 Franchise Disclosure Document, non-competition covenants do not apply to the Multi-Unit Development Agreement itself after termination or expiration. However, each individual Spa Location Franchise developed under the Multi-Unit Development Agreement will be subject to the non-competition covenants outlined in its respective Franchise Agreement. This means that while the agreement to develop multiple units isn't restricted, each spa location you open will have its own set of rules about what you can do after you stop operating that location.

Specifically, after the termination or expiration of a C3 Wellness Spa franchise, the franchisee is prohibited from any involvement, ownership, or interest in a competing business for 24 months. This restriction applies within the franchisee's designated territory, a 25-mile radius of that territory, and a 25-mile radius of any other C3 Wellness Spa location's designated territory. Additionally, the franchisee must continue to comply with confidentiality, non-disclosure, and non-solicitation covenants.

This post-term non-compete is a fairly standard practice in franchising to protect the brand and other franchisees in the system. The geographic scope and duration (24 months) are typical, but prospective franchisees should carefully evaluate these restrictions to ensure they are comfortable with the limitations on their business activities after leaving the C3 Wellness Spa system. It is important to understand how these restrictions could impact future business opportunities, especially if the franchisee intends to stay in the wellness or spa industry.