During the Post-Term Restricted Period, does the restriction on having an interest in a Competitive Business apply to all Competitive Businesses or only those within a specific area for a Casiola franchisee?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
siola 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.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, the restriction on having an interest in a Competitive Business during the Post-Term Restricted Period applies only to Competitive Businesses located within a Restricted Territory. This means that after the franchise agreement ends, a franchisee is restricted from having an interest in a competing business, but only if that business is within a specific geographic area.
This restriction is limited to the franchisee's Restricted Territory, allowing the franchisee to potentially engage with competitive businesses outside of that area without violating the agreement. However, the franchisee is not allowed to engage in any Prohibited Activities during the Post-Term Restricted Period. If the franchisee does engage in Prohibited Activities, the Post-Term Restricted Period will be extended by the amount of time the franchisee was engaging in said activities.
This clause also extends to the franchisee's Owners, who must also adhere to these restrictions by signing a Franchise Owner Agreement and Guaranty. Casiola considers any violation of these restrictions as unfair competition that would cause irreparable harm to the franchisor and the System.