What is the Cd One Price Cleaners franchisee's obligation regarding compliance with Section 15.2?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
15. COVENANTS
- 15.1 Best Efforts and Store Management.
Only Franchisee is authorized to operate the Store, and Franchisee shall at all times faithfully, honestly and diligently perform its obligations and fully exploit its rights under this Agreement.
Franchisee (or, if Franchisee is a business entity, the Designated Principal or the on-premises manager) must personally devote all of his or her business time and efforts to the on-premises management of the Store.
The Store must at all times be under the on-premises supervision of a manager who has completed Franchisor's then current training program or other training-related requirements to Franchisor's satisfaction.
- 15.2 Non-Competition During Term.
Franchisee acknowledges that it shall receive valuable specialized training and confidential information, including, without limitation, information regarding the operational, sales, promotional and marketing methods and techniques of Franchisor and the Operating Plans.
Therefore, Franchisee covenants that, during the Term, neither Franchisee nor any of its owners, nor any member of the immediate family of Franchisee or any of its owners, shall, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with, any person or legal entity:
15.2.1 Divert or attempt to divert any business or customer of the Store to any Competitive Business (defined below) by inducement or otherwise, or do or perform any other act injurious or prejudicial to the goodwill associated with the Proprietary Marks or the Operating Plans; or
15.2.2 Own any equity interest in, maintain, advise, operate, engage in, be employed by, make loans to, have any other direct or indirect interest in, or otherwise maintain any direct or indirect relationship or association with, a business which offers dry cleaning, finished laundry services and/or other cleaning services for garments or household goods, alteration services, garment or household good repair or restoration services, or any services ancillary thereto (including, without limitation, pickup or delivery of items) (each a "Competitive Business"), wherever located, and including, without limitation, providing any services of a Competitive Business to any other CD Store.
Source: Item 23 — Receipts (FDD pages 72–263)
What This Means (2025 FDD)
According to the 2025 FDD, Section 15.2 of the Cd One Price Cleaners franchise agreement outlines the franchisee's non-competition obligations during the term of the agreement. Cd One Price Cleaners acknowledges that they will receive valuable specialized training and confidential information regarding the operational, sales, promotional, and marketing methods and techniques of Cd One Price Cleaners and the Operating Plans.
During the term of the agreement, the franchisee, their owners, and their immediate family members are prohibited from engaging in any activity that could divert business from the Cd One Price Cleaners store to a Competitive Business. They are also restricted from owning any equity interest in, maintaining, advising, operating, being employed by, making loans to, or having any direct or indirect interest in a Competitive Business. A Competitive Business is defined as a business that offers dry cleaning, finished laundry services, other cleaning services for garments or household goods, alteration services, garment or household good repair or restoration services, or any services ancillary to these, wherever located. This includes providing services of a Competitive Business to any other Cd One Price Cleaners.
In practical terms, this means that a Cd One Price Cleaners franchisee and their close family members must not be involved in any competing dry cleaning or laundry business during the term of their franchise agreement. This restriction is in place to protect Cd One Price Cleaners's confidential information, operational methods, and goodwill. Failure to comply with these covenants could result in a breach of the franchise agreement, as stated in section 13.2.5.