Are Card My Yard owners bound by the same non-compete and confidentiality obligations as the franchisee?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to disclose the Confidential Information to your Owners and employees only to the extent reasonably necessary for the operation of the Card My Yard business pursuant to this Agreement.
Our Confidential Information is proprietary, includes trade secrets owned by us and our Affiliates, and is disclosed to you solely on the condition that you agree, and you do hereby agree, that you: (i) will not use the Confidential Information in any other business or capacity; (ii) will maintain the confidentiality of the Confidential Information during and after the term of this Agreement; (iii) will not make unauthorized copies of any portion of the Confidential Information; and (iv) will adopt and implement all reasonable procedures that we prescribe from time to time to prevent the unauthorized use or disclosure of the Confidential Information, including, without limitation, restrictions on disclosure of the Confidential Information to Card My Yard business personnel and others.
These covenants shall survive the expiration, termination or transfer of this Agreement or any interest herein and shall be perpetually binding upon you and each of the Owners.
- C.
Noncompetition Covenants.
You and your Owners specifically acknowledge that, pursuant to this Agreement, you and they will receive access to valuable training and Confidential Information which are beyond your and their present skills and experience, including, without limitation, information regarding operational, sales, promotional and marketing methods and techniques of the System.
You and your Owners further acknowledge that such specialized training and Confidential Information provide a competitive advantage, and that gaining access to them is a primary reason for entering into this Agreement.
Accordingly, you and your Owners agree as follows:
(1) With respect to you, during the term of this Agreement (or with respect to each of the Owners, for so long as such person satisfies the definition of "Owner" under this Agreement), except as otherwise approved in writing by us, neither you nor any of your Owners shall, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, legal entity or association:
(a) Directly or indirectly divert, or attemptto divert, any business or customer of Card My Yard businesses to any competitor, or do or perform any other act injurious or prejudicial to the goodwill associated with the Marks and the System.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, both the franchisee and their owners are subject to confidentiality and non-competition covenants. The franchisee must disclose confidential information to their owners and employees only to the extent reasonably necessary for operating the Card My Yard business. The franchisee also needs to ensure that owners and employees maintain the confidentiality of the manuals and the information within them.
The FDD states that owners cannot divert business or customers to competitors or perform actions that are harmful to the goodwill associated with the Card My Yard brand. This restriction applies during the term of the Franchise Agreement for the franchisee and as long as the person meets the definition of "Owner" under the agreement.
Furthermore, both the franchisee and their owners acknowledge that they will receive valuable training and confidential information that provides a competitive advantage. Because of this access, they agree to these non-compete and confidentiality terms. These covenants remain in effect even after the agreement expires, terminates, or is transferred, and they are perpetually binding on the franchisee and their owners.