Does the Card My Yard Franchise Agreement include a non-compete agreement?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
- a.
Directly or indirectly divert, or attempt to divert any business opportunity or customer of Card My Yard businesses to any competitor; and
- b.
Directly or indirectly, for yourself or through, on behalf of, or in conjunction with any other person, persons, partnership, corporation, limited liability company, or other association or entity, own, maintain, operate, engage in or have any financial or beneficial interest in, advise, assist or make loans to, any business which is the same as or similar to a Card My Yard business (including any business that offers yard greeting services or other celebratory display items or services of any kind, including but not limited to, balloon displays, lighted displays, etc.) and which is, or is intended to be, located within the United States, its territories or commonwealths, or any other country, province, state or geographic area in which we or our Affiliates have used, sought registration of or registered the Marks or similar marks or operate or license others to operate a business under the Marks or similar marks; provided that during the two year-period following termination, expiration or transfer of the Franchise Agreement, the non-compete restrictions shall be limited to operations: (i) at the Franchise Location, (ii) within the Protected Area, (iii) within a twenty-five (25)-mile radius of the Franchise Location, or (iv) within a twenty-five (25)-mile radius of any Card My Yard business then in existence or under construction.
At our request, you must have your General Manager and any other personnel who will have access to our training, sign covenants not to compete, and such persons must maintain the confidentiality of information they have access to through their relationship with you. These covenants will be in substantially the form of Exhibit B
to the Franchise Agreement. We have the right, in our sole discretion, to decrease the period of time or geographic scope of the non-competition covenants or eliminate the non-competition covenant altogether for any person who must sign an agreement described in this paragraph.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
Yes, according to Card My Yard's 2025 Franchise Disclosure Document, the Franchise Agreement contains non-compete clauses that apply both during the term of the agreement and after termination, expiration, or transfer. During the term of the Franchise Agreement, franchisees are restricted from engaging in any competitive business. Specifically, franchisees cannot divert business opportunities or customers to competitors, nor can they own, operate, or have a financial interest in any business similar to Card My Yard within the United States or any area where Card My Yard or its affiliates use or have registered their trademarks. This includes businesses offering yard greeting services or similar celebratory displays.
Post-termination, the non-compete restrictions are limited to a two-year period. During this time, the restrictions apply to operations at the Franchise Location, within the Protected Area, within a 25-mile radius of the Franchise Location, or within a 25-mile radius of any existing or under-construction Card My Yard business. These restrictions are designed to protect Card My Yard's market and goodwill by preventing franchisees from immediately leveraging their knowledge and resources gained from the franchise to compete against the system.
Furthermore, the Franchise Agreement stipulates that at Card My Yard's request, the General Manager and other personnel with access to training must sign non-compete agreements. These agreements will be in the form of Exhibit B to the Franchise Agreement. Card My Yard retains the right to modify or eliminate these non-competition covenants for any person required to sign such an agreement. The Franchise Agreement also states that the franchisee's Principal Owner must sign a Guaranty and Assumption Agreement, binding them individually to the covenants against competition. These measures ensure that multiple parties associated with the franchise are legally bound to uphold the non-compete obligations, providing Card My Yard with comprehensive protection against competition.