What activities are considered Prohibited Activities for a former Casiola franchisee during the Restricted Period?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
r, would constitute unfair competition and would cause harm to Franchisor, the System and other Casiola Business franchisees. Franchisee agrees that the foregoing covenants and obligations shall also apply to Franchisee's Owners and that Franchisee's Owners shall each execute and deliver to Franchisor the Franchise Owner Agreement and Guaranty in the form attached to this Agreement as Exhibit 1.
6.E. RESTRICTIVE COVENANTS: UNFAIR COMPETITION AND POST-TERMINATION NON-COMPETITION OBLIGATIONS
Franchisee agrees that during the Post-Term Restricted Period, Franchisee shall not engage in any Prohibited Activities provided, however, that the Prohibited Activities relating to Franchisee having an interest in a Competitive Business will only apply with respect to a Competitive Business that is located within a Restricted Territory. If Franchisee is engaged in any Prohibited Activities during the Post-Term Restricted Period, Franchisee agrees that Franchisee's Post-Term Restricted Period will be extended by the period of time during which Franchisee was engaging in the Prohibited Activity and, any such extension of time will not be construed as a waiver of Franchisee's breach or otherwise impair any of Franchisor's rights or remedies relating to Franchisee's breach. Franchisee agrees that the foregoing covenants and restrictions shall also apply to Franchisee's Owners and that Franchisee's Owners shall each execute and deliver to
Franchisor the Franchise Owner Agreement and Guaranty in the form attached to this Agreement as Exhibit 1. Franchisee agrees that the covenants and restrictions set forth in this Article 6.E. and otherwise in this Article 6, are fair and reasonable and that if Franchisee engaged in any Prohibited Activity that such actions would constitute acts of unfair competition, causing irreparable harm to Franchisor and the System.
6.F. REASONABLENESS OF RESTRICTIVE COVENANTS AND OBLIGATIONS
Franchisee agrees that: (a) the terms of this Article 6 are reasonable both in time and in scope of geographic area; and (b) Franchisee has sufficient resources and business experience and opportunities to earn an adequate living while complying with the terms of this Article 6.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, Prohibited Activities during the Post-Term Restricted Period include:
- Owning or having any legal or equitable interest in a Competitive Business, with an exception for owning 3% or less of a publicly traded company that is a Competitive Business, within a Restricted Territory.
- Operating, managing, funding, or performing services for a Competitive Business.
- Diverting or attempting to divert any business or customers from Casiola, its affiliates, or franchisees.
- Inducing any customer or client of Casiola, its affiliates, or franchisees to any other business that is not a Casiola Business.
The Restricted Territory is defined as the franchisee's Operating Market and a 25-mile radius surrounding it. If a franchisee engages in any Prohibited Activities during the Post-Term Restricted Period, the period will be extended by the duration of the prohibited activity. Casiola also states that engaging in prohibited activities constitutes unfair competition and causes irreparable harm to Casiola and the System.