Can a Card My Yard franchisee own a similar business during the franchise term?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Franchisee's Undertaking
Franchisee agrees to make all commercially reasonable efforts to ensure that you act as required by this Agreement.
Miscellaneous
1. You agree that:
- a.
Each of the covenants herein contain reasonable limitations as to time, geographical area, and scope of activity to be restrained and do not impose a greater restraint than is necessary to protect the goodwill of the System or our other business interests.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, a franchisee is restricted from owning or being involved with a similar business during the term of the franchise agreement. Specifically, franchisees cannot directly or indirectly own, maintain, operate, or have any financial interest in a business that is the same as or similar to a Card My Yard business. This includes businesses offering yard greeting services, celebratory display items, balloon displays, or lighted displays. This restriction applies within the United States, its territories, commonwealths, or any other geographic area where Card My Yard or its affiliates have used, sought registration of, or registered their trademarks, or operate or license others to operate under similar marks.
This non-compete obligation is in place to protect Card My Yard's business interests, system, and brand recognition. The franchise agreement specifies that after the termination, expiration, or transfer of the franchise agreement, the non-compete restrictions are limited to a two-year period. During this period, 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 considered reasonable in terms of time, geographical area, and scope of activity, and are designed to protect the goodwill of the Card My Yard system. Prospective franchisees should carefully consider these non-compete terms and how they might affect their future business opportunities, both during the franchise term and after its conclusion. It is important to understand the specific geographic limitations and the types of businesses that are considered competitive to Card My Yard.