Does Cd One Price Cleaners require franchisees to obtain restrictive covenants from owners?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.7 Covenants from Individuals. At Franchisor's request, Franchisee shall obtain execution of restrictive covenants in the form that Franchisor reasonably specifies (including covenants applicable upon the termination of a person's relationship with Franchisee) from each direct or indirect owner of Franchisee. Franchisee shall furnish copies of such covenants to Franchisor upon request. Every covenant required by this Section 15.7 shall be in a form approved by Franchisor, including, without limitation, specific identification of Franchisor as a third party beneficiary of such covenants with the independent right to enforce them.
Source: Item 23 — Receipts (FDD pages 72–263)
What This Means (2025 FDD)
According to Cd One Price Cleaners' 2025 Franchise Disclosure Document, franchisees are required to obtain restrictive covenants from individuals associated with the franchise. Specifically, at Cd One Price Cleaners' request, the franchisee must ensure that each direct or indirect owner of the franchise executes restrictive covenants. These covenants must be in a form that Cd One Price Cleaners approves.
These restrictive covenants also need to identify Cd One Price Cleaners as a third-party beneficiary, which grants Cd One Price Cleaners the independent right to enforce these agreements. Furthermore, franchisees must provide copies of these covenants to Cd One Price Cleaners upon request.
This requirement ensures that individuals with an ownership stake in the Cd One Price Cleaners franchise are legally bound to certain obligations, such as non-competition and confidentiality, protecting Cd One Price Cleaners' interests. This is a fairly standard practice in franchising, as franchisors seek to protect their brand, trade secrets, and customer relationships.