What happens if a Card My Yard franchisee violates the non-compete agreement?
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)
The 2025 Card My Yard Franchise Disclosure Document (FDD) outlines several stipulations regarding non-compete agreements for franchisees and their employees. Franchisees are prohibited from diverting business opportunities or customers to competitors, and from engaging in or having a financial interest in any similar business within the United States or any area where Card My Yard or its affiliates operate. This restriction applies during the term of the franchise agreement and for a period after termination, expiration, or transfer of the agreement.
Specifically, for two years following termination, expiration, or transfer of the Franchise Agreement, the non-compete restrictions are limited 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. The franchisee also agrees to ensure that their employees adhere to these non-compete terms, emphasizing the importance of protecting Card My Yard's confidential information and system against unfair competition.
If a franchisee violates the non-compete agreement, Card My Yard has the right to take action to protect its interests. While the FDD does not explicitly detail the specific legal remedies Card My Yard may pursue, it asserts that the non-compete covenants contain reasonable limitations and do not impose a greater restraint than necessary to protect the goodwill of the Card My Yard system. This suggests that Card My Yard could seek injunctive relief, monetary damages, or other legal remedies to enforce the non-compete provisions and prevent further competitive harm. Prospective franchisees should consult with a legal professional to fully understand the implications of the non-compete agreement and the potential consequences of violating it.