After termination of a Card My Yard franchise, what geographic areas are covered by the non-compete agreement?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, after the termination, expiration, or transfer of the Franchise Agreement, a franchisee is restricted from operating a similar business for two years. This non-compete agreement applies 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.
This means that a former Card My Yard franchisee cannot directly or indirectly own, operate, or be involved with a similar business that offers yard greeting services or other celebratory display items within these specified geographic boundaries. The restrictions also apply to any business located within the United States, its territories, or any other country, province, state, or geographic area where Card My Yard or its affiliates have used, sought registration of, or registered their trademarks, or operate or license others to operate a business under the Marks or similar marks.
The non-compete agreement aims to protect Card My Yard's market and goodwill by preventing former franchisees from leveraging the brand's established reputation and customer base to compete against existing franchisees or the franchisor itself. The geographic limitations ensure that the restriction is not overly broad and is limited to areas where the Card My Yard business is likely to be directly impacted.
It is important for prospective franchisees to carefully consider these non-compete restrictions, as they could significantly limit their business opportunities after leaving the Card My Yard system. Franchisees should seek legal counsel to fully understand the implications of these restrictions and how they might affect their future business plans.