During the term of the Card My Yard agreement, can a franchisee divert business to a competitor?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
- 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.
- b.
Each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, franchisees are prohibited from diverting business opportunities or customers to competitors, either directly or indirectly, during the term of the agreement. This restriction is in place to protect the goodwill associated with the Card My Yard brand, marks, and overall system.
Specifically, franchisees cannot own, maintain, operate, engage in, or have any financial interest in a business that is the same as or similar to Card My Yard. This includes businesses offering yard greeting services, celebratory display items, or services like balloon or lighted displays. This restriction applies to businesses located within the United States, its territories, commonwealths, or any other geographic area where Card My Yard or its affiliates have registered their marks or operate businesses under similar marks.
These covenants include reasonable limitations regarding time, geographical area, and scope of activity. The agreement specifies that these restrictions do not impose a greater restraint than necessary to protect the goodwill of the Card My Yard system or the franchisor's other business interests. Each covenant is also construed as independent of any other provision within the agreement, ensuring that if one part is deemed unenforceable, the rest of the agreement remains in effect.
Even after the termination, expiration, or transfer of the Franchise Agreement, non-compete restrictions apply for a period of two years. These 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.