During the term of the Card My Yard franchise, what non-competition covenants apply to the franchisee?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
| n. Franchisor's right of first refusal to acquire franchisee's business | Section XV.D. | On 30 days' written notice, we have the option to purchase an interest being transferred on the same terms and conditions offered by a third party. |
|---|---|---|
| o. Franchisor's option to purchase franchisee's business | Sections XIX.A(8) and (9) and XIX.B. | Upon termination or expiration we have the option to purchase your advertising materials bearing the Marks at your cost. We also have the option to acquire the assets of the Card My Yard business (including all yard signs and letters) from you at fair market value. |
| p. Death or disability of franchisee | Section XV.E. | On death or permanent disability of you or an Owner the person's interest must be transferred to someone we approve within 6 months. |
| q. Non-competition covenants during the term of the franchise | Section XI.C.(1) | Subject to applicable state law: You may not operate or have an interest in a business which is similar to the franchised business and which is 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. |
Source: Item 17 — RENEWAL TERMINATION TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 51–55)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, franchisees are subject to non-competition covenants during the term of the franchise. Specifically, a franchisee may not operate or have an interest in a business similar to the Card My Yard franchised business. This restriction applies within the United States, its territories and commonwealths. It also extends to any other country, province, state, or geographic area where Card My Yard or its affiliates have used, sought registration of, or registered their Marks or similar marks. This also includes areas where Card My Yard operates or licenses others to operate a business under their Marks or similar marks. This covenant is subject to applicable state law.
In practical terms, this means that while operating a Card My Yard franchise, a franchisee cannot own or be involved in any competing yard greeting or similar business within the specified geographic areas. This restriction is designed to protect Card My Yard's brand and market share by preventing franchisees from directly competing with the franchise system.
Prospective franchisees should carefully consider the scope of this non-competition covenant and how it might affect their ability to pursue other business ventures, both during the franchise term and after its termination or expiration. It is important to understand the specific geographic areas covered by the restriction and to seek legal advice if there are any concerns about its enforceability or potential impact on other business interests. Franchisees should also be aware that the non-compete is subject to applicable state laws, which can vary significantly.