How is the Restricted Period affected if a Casiola franchisee engages in prohibited activity?
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. Casiola states that this extension will not be considered a waiver of the franchisee's breach, nor will it impair any of Casiola's rights or remedies relating to the breach.
This means that if a Casiola franchisee violates the non-compete agreement after the franchise agreement ends, the length of time they are restricted from competing with Casiola will be increased by the duration of the violation. For example, if the non-compete lasts for one year after the agreement ends, but the franchisee immediately starts a competing business for three months, the non-compete period would be extended by those three months, resulting in a total restricted period of 15 months.
Casiola emphasizes that engaging in prohibited activities constitutes unfair competition and will irreparably harm Casiola and its system. This clause aims to protect Casiola's business interests and the integrity of its franchise system by discouraging franchisees from competing unfairly, even after their franchise agreement has ended.