What business practices are Casiola franchisees prohibited from engaging in?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
, employees and agents where disclosure of the Confidential Information was necessary for the operations of the Franchised Business and where such director, officer, employee and/or agent previously executed and timely delivered to Franchisor the Confidentiality Agreement in the form attached as Exhibit 2.
6.D. RESTRICTIVE COVENANTS: UNFAIR COMPETITION AND IN-TERM NON-COMPETITION OBLIGATIONS
Franchisee agrees that during the Term of this Agreement, Franchisee shall not engage in the following activities (the "Prohibited Activities"): (a) owning and/or having any legal or equitable interest whether, as an individual proprietor, owner, partner, member or shareholder of a Corporate Entity, or, in any similar capacity, in a Competitive Business other than, owning an interest of 3% or less in a publicly traded company that is a Competitive Business; (b) operating, managing, funding and/or performing services whether, as an employee, officer, director, manager, consultant, representative, agent, and/or creditor or, in any similar capacity, for or benefitting a Competitive Business; (c) diverting or attempting to divert any business or customers from Franchisor or, one of Franchisor's affiliates or franchisees; (d) inducing any customer or client of Franchisor, Franchisor's affiliates, franchisees of the System, or, of Franchisee, to any other person or business that is not a Casiola Business; and/or (e) engaging in any actions, inactions, and/or activities in violation of Articles 6.B. and/or 6.C. of this Agreement (all, individually and collectively, referred to as the "Prohibited Activities"). Franchisee agrees that if Franchisee were to engage in the Prohibited Activities that such actions would be unfair, 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;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, franchisees are restricted from certain business activities during the term of their agreement. These prohibited activities include owning or having a 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. Franchisees are also barred from operating, managing, funding, or performing services for a competitive business, and from diverting or attempting to divert business or customers from Casiola or its affiliates and franchisees.
Additionally, Casiola franchisees cannot induce any customer or client of Casiola, its affiliates, or other franchisees to any other business that is not a Casiola business. Franchisees must also ensure that all advertising and promotion of the franchised business is factual, ethical, and conforms to Casiola's standards. They must avoid any business, advertising, or personal conduct that could harm Casiola, the system, or its licensed marks. Casiola retains the right to reject any advertising related to the franchised business or the use of its licensed marks.
Casiola franchisees must conduct their operations within their designated operating market and target their marketing efforts accordingly. They are prohibited from engaging in media distribution outside of their operating market unless it is a joint effort with other Casiola businesses and authorized by Casiola in writing. Franchisees must also comply with anti-terrorism laws and ensure that they and their owners are not in violation of these laws or listed on any related annexes.
Furthermore, franchisees are prohibited from disclosing the contents of the operations manual or confidential information to unauthorized third parties. They must not engage in any activity that harms Casiola's brand or reputation, breach any ancillary agreements, or engage in intentionally dishonest or unethical conduct that could embarrass Casiola. Franchisees must also complete the required training programs to Casiola's satisfaction.