What is the definition of 'Owner' as it relates to the non-competition agreement for a Card My Yard franchise?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
"Owners" mean those persons and entities which, collectively and individually, hold an ownership interest in you and in any entity directly or indirectly controlling you.
You and your Owners specifically acknowledge that, pursuant to this Agreement, you and they will receive access to valuable training and Confidential Information which are beyond your and their present skills and experience, including, without limitation, information regarding operational, sales, promotional and marketing methods and techniques of the System.
Accordingly, you and your Owners agree as follows:
(1) With respect to you, during the term of this Agreement (or with respect to each of the Owners, for so long as such person satisfies the definition of "Owner" under this Agreement), except as otherwise approved in writing by us, neither you nor any of your Owners shall, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, legal entity or association:
(a) Directly or indirectly divert, or attemptto divert, any business or customer of Card My Yard businesses to any competitor, or do or perform any other act injurious or prejudicial to the goodwill associated with the Marks and the System.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, the term 'Owners' in the context of the non-competition agreement refers to individuals or entities that hold an ownership interest in the franchisee or any entity that directly or indirectly controls the franchisee. This definition is crucial because the non-competition covenants apply not only to the franchisee but also to these 'Owners.'
This means that anyone with an ownership stake in your Card My Yard franchise, or in any company that controls your franchise, is also bound by the non-competition agreement. This agreement restricts them from engaging in activities that could harm Card My Yard's business, such as diverting customers to competitors or acting in ways that damage the brand's goodwill. This restriction applies for as long as they meet the definition of 'Owner' under the agreement.
For a prospective franchisee, this has significant implications. Before signing the franchise agreement, it's essential to understand who qualifies as an 'Owner' in your specific situation. If you have partners, investors, or a holding company involved, they will all be subject to the non-competition terms. Failing to ensure their compliance could lead to a breach of the franchise agreement and potential legal consequences. Therefore, it is important to fully disclose all ownership interests to Card My Yard and ensure that all parties understand and agree to the non-competition obligations.