What is the consequence if a Casiola franchisee engages in Prohibited Activities during the Restricted Period?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
If you engage in any Prohibited Activities during the Restricted Period, then you agree that your Restricted Period will be extended by the period of time during which you were engaging in the prohibited activity (any such extension of time will not be construed as a waiver of your breach or otherwise impair any of our rights or remedies relating to your breach).
You agree that this restriction is fair and reasonable and that if you did engage in a Prohibited Activity that such actions would constitute acts of unfair competition and will irreparably harm us and the System.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, if a franchisee engages in any Prohibited Activities during the Restricted Period, the Restricted Period will be extended by the amount of time the franchisee was engaged in the prohibited activity. This extension will not be considered a waiver of the breach, nor will it impair any of Casiola's rights or remedies related to the breach.
Casiola defines "Prohibited Activities" as owning an interest in a competitive business (with a limited exception for owning 3% or less of a publicly traded company), operating or performing services for a competitive business, diverting business or customers from Casiola, or inducing customers to another business that is not a Casiola Business. The Restricted Period appears to be the period after the termination of the franchise agreement.
Casiola emphasizes that engaging in Prohibited Activities constitutes unfair competition and will irreparably harm Casiola and the System. This highlights the importance of understanding and adhering to the non-compete obligations outlined in the franchise agreement to avoid potential legal and financial repercussions.