For Canine Dimensions, can a former employee be a shareholder of a competing business during the non-compete period?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
C. NON-COMPETITION
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- Employee acknowledges and agrees that during the term of his employment by the Employer and for a period of two (2) years after the termination of employment (for whatever reason and whether voluntary or not) he will not, on his own behalf nor directly or indirectly (whether as employee, partner, proprietor, shareholder, consultant, volunteer or in any other capacity) on behalf of any other person, business or other entity, engage in any business activity whatsoever which is in competition with any business activity engaged in by Employer or Franchisor within the geographical Protected Territory served by Employer's office where Employee is employed, or which might have the effect of lessening the need for goods or services supplied by Employer or Franchisor in such Protected Territory.
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- Employee agrees, in addition to the provisions of Paragraph C.1. hereof, that for the period of two (2) years following the termination of his employment (for whatever reason and whether voluntary or not) he will not directly or indirectly solicit, entice, divert, lure, pirate, take away or interfere with any of the Employer's or Franchisor's customers, trade, business, patronage, suppliers, employees, agents or consultants within fifty (50) miles of any Franchised Business in the System. As used herein "customers" shall mean: any person, business or entity which either (i) has transacted any business with Employer or Franchisor; or (ii) was actively pursued by the Employer or Franchisor, during the term of Employee's employment, to become a customer of the Employer or Franchisor; or (iii) whose identity became known to Employee as a result of Employee's access to a customer list or other Confidential Information of Employer or Franchisor (including, but not limited to, response cards, target lists, leads, etc.).
D. ENFORCEABILITY
- Employee further acknowledges and agrees that Employer and Franchisor will have no adequate remedy at law if the Employee breaches any provision contained in this Agreement. In the event of any such breach, Employer or Franchisor shall have the right, in addition to any other remedy that it may have, to obtain in any court of competent jurisdiction, injunctive relief to restrain any breach or threatened breach of any covenant contained herein, without necessity of bond.
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, a former employee is restricted from engaging in activities that compete with Canine Dimensions for a period of two years after their employment ends. Specifically, the employee cannot act on their own behalf or for another entity as an employee, partner, proprietor, shareholder, consultant, or volunteer. This restriction applies to any business activity that competes with Canine Dimensions within the geographical Protected Territory served by the employer's office where the employee worked, or that could reduce the need for Canine Dimensions' goods or services in that territory.
This non-compete clause explicitly prevents a former employee from being a shareholder in a competing business within the specified timeframe and geographical area. The clause aims to protect Canine Dimensions' market share and business interests by preventing former employees from leveraging their knowledge and experience gained while working for Canine Dimensions to benefit a competing entity. The agreement also prevents the employee from soliciting or interfering with Canine Dimensions' customers, suppliers, employees, agents, or consultants within fifty miles of any Franchised Business in the System for two years after termination.
Canine Dimensions emphasizes the importance of this non-compete agreement by stating that they would have no adequate legal remedy if an employee breaches these provisions. In the event of a breach, Canine Dimensions has the right to seek injunctive relief from a court to prevent any further violation of the agreement, without needing to post a bond. This highlights the seriousness with which Canine Dimensions views the non-compete obligations and their commitment to protecting their business interests and franchise network.
Prospective franchisees should be aware of these restrictions, as they could impact their ability to hire former employees of other similar businesses or their own future opportunities if they were to leave Canine Dimensions. It is important to fully understand the scope and implications of the non-compete agreement before entering into a franchise agreement with Canine Dimensions.