What happens to the 2-year non-competition period if a Card My Yard franchisee is non-compliant?

According to Card My Yard's 2025 Franchise Disclosure Document, if a franchisee or their owners have claims against Card My Yard, it will not be a valid defense against the enforcement of the non-competition covenants. The two-year non-competition period can be affected by periods of non-compliance. Specifically, the non-competition period will be tolled during any periods of non-compliance. This means the clock stops running on the non-compete while the franchisee is not in compliance with the agreement.

Furthermore, the non-competition period will be extended for a time period equal to the duration of the noncompliance. For example, if a franchisee is non-compliant for three months, the two-year non-competition period will be extended by those same three months. This ensures that Card My Yard is protected from unfair competition even if the franchisee breaches the agreement.

This clause is significant for prospective franchisees as it emphasizes the importance of adhering to the franchise agreement. Non-compliance can effectively lengthen the period during which a franchisee is restricted from engaging in competitive activities after the termination or transfer of their franchise. Franchisees should be aware of what constitutes non-compliance under the agreement to avoid unintentionally extending their non-compete obligations.