Does the Card My Yard franchise agreement include covenants against competition?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchise Agreement requires you to designate a "Principal Owner." Your Principal Owner is the main individual responsible for your business. Your Principal Owner must meet our qualifications and must be approved by us. Your current and future owners, including your Principal Owner, must sign a Guaranty and Assumption Agreement ("Guaranty"), guaranteeing your performance and binding themselves individually to certain provisions of the Franchise Agreement, including the covenants against competition and disclosure of confidential information, restrictions on transfer and dispute resolution procedures.
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 9–13)
What This Means (2025 FDD)
Yes, according to the 2025 Card My Yard Franchise Disclosure Document, the franchise agreement includes covenants against competition. The document states that all current and future owners, including the Principal Owner, must sign a Guaranty and Assumption Agreement. This agreement binds them individually to certain provisions of the Franchise Agreement, specifically including the covenants against competition.
This means that as a Card My Yard franchisee, you and your owners will be legally restricted from engaging in competitive activities, both during the term of the franchise agreement and potentially for a period after the agreement terminates. The specifics of these restrictions, such as the geographic scope and duration, are not detailed in this excerpt but would be outlined in the Franchise Agreement itself.
It is typical in franchising to have non-compete clauses to protect the brand and the franchise system. Prospective Card My Yard franchisees should carefully review the Franchise Agreement to fully understand the terms and scope of these covenants, including what activities are prohibited, the geographic area covered, and the length of time the restrictions are in place. Understanding these restrictions is crucial before signing the agreement, as violating them could lead to legal consequences.