What constitutes a violation of Section 13.2 (non-compete) for a Care Plus Medical Ucc franchise?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
13.2 Covenants Not to Compete.
- (a) Restriction In Term. During the term of this Agreement, neither Franchisee, any Owner, nor any spouse of an Owner (the "Restricted Parties") shall directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor.
- (b) Restriction Post Term. For two years after this Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer), no Restricted Party shall directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor within five miles of Franchisee's Territory or the territory of any other Care Plus Medical business operating on the date of termination or transfer, as applicable. If this Agreement is terminated before the Territory is determined, then the area of non-competition will the Development Area and the territory of any other Care Plus Medical business operating on the date of termination.
- (c) Interpretation. The parties agree that each of the foregoing covenants is independent of any other covenant or provision of this Agreement. If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any arbitrator or court, then the parties intend that the arbitrator or court modify such restriction to the extent reasonably necessary to protect the legitimate business interests of Care Plus Medical UCC. Franchisee agrees that the existence of any claim it may have against Care Plus Medical UCC shall not constitute a defense to the enforcement by Care Plus Medical UCC of the covenants of this Section. If a Restricted Party fails to comply with the obligations under this Section during the restrictive period, then the restrictive period will be extended an additional day for each day of noncompliance.
- 13.3 General Manager and Key Employees. If requested by Care Plus Medical UCC, Franchisee will cause its general manager and other key employees to sign Care Plus Medical UCC's then-current form of confidentiality and non-compete agreement (unless prohibited by applicable law).
Source: Item 22 — CONTRACTS (FDD page 41)
What This Means (2024 FDD)
According to the 2024 Care Plus Medical Ucc Franchise Disclosure Document, Section 13.2 outlines the covenants not to compete, specifying actions that would constitute a violation both during and after the franchise agreement term. During the term of the agreement, the franchisee, any owner, or any spouse of an owner is prohibited from having any ownership interest in, lending money or providing financial assistance to, providing any services to, or being employed by any competitor. This restriction applies directly and indirectly to the franchisee and related parties.
Post-term, for two years after the agreement expires or is terminated, the same restrictions apply. No restricted party can have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by any competitor within five miles of the franchisee's territory or the territory of any other Care Plus Medical Ucc business operating on the date of termination or transfer. If the territory is not determined before termination, the non-competition area will be the Development Area and the territory of any other Care Plus Medical Ucc business operating on the date of termination.
These covenants are independent, and if any part is deemed unenforceable, the intention is for the arbitrator or court to modify the restriction to protect Care Plus Medical Ucc's business interests. Any claims the franchisee may have against Care Plus Medical Ucc do not serve as a defense against the enforcement of these covenants. Non-compliance during the restrictive period extends the period by an additional day for each day of non-compliance. Care Plus Medical Ucc may also require the franchisee's general manager and key employees to sign confidentiality and non-compete agreements.