What is the duration of the non-compete period for a Chem Dry franchisee after termination or expiration of the agreement?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
Upon termination or expiration of this Agreement, FRANCHISEE and its Owner(s) agree that for a period of two (2) years, commencing on the effective date of termination or expiration, or the date on which FRANCHISEE actually ceases to conduct the business described in this Agreement, whichever is later, neither FRANCHISEE nor its owner(s) will (a) participate in or have any direct or indirect interest (e.g., through a spouse) as a disclosed or beneficial owner, investor, lender, partner, director, officer, manager, consultant, employee, representative or agent, or in any other capacity, in any Competitive Business, (b) solicit business from customers of the BUSINESS or contact any of our suppliers or vendors for any Competitive Business purpose, or (c) divert or attempt to divert any business or customer from the BUSINESS to any Competitive Business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks or the System, within:
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- The Franchised Area as defined in this Agreement;
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- The geographic area encompassed by the Franchised Area(s) of any Chem-Dry Business as of the date of the termination or expiration of this Agreement; or
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- A geographic area that is contained in a circle having a radius of 10 miles outward from the outside boundary of the Franchised Area as defined in this Agreement.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, a franchisee and their owners agree to a non-compete period of two years. This period begins on the effective date of the termination or expiration, or the date the franchisee actually stops conducting the Chem Dry business, whichever is later.
During this two-year period, the franchisee and their owners are restricted from participating in or having any direct or indirect interest in a Competitive Business. This includes involvement as an owner, investor, lender, partner, director, officer, manager, consultant, employee, representative, or agent. They are also prohibited from soliciting business from existing Chem Dry customers or contacting Chem Dry's suppliers or vendors for any Competitive Business purpose.
The non-compete extends to preventing the franchisee from diverting or attempting to divert any business or customer from Chem Dry to any Competitive Business, whether through direct or indirect means. Additionally, franchisees must not perform any action that could be harmful or prejudicial to the goodwill associated with Chem Dry's trademarks or system. The geographic scope of this non-compete includes the original Franchised Area, the combined Franchised Areas of any Chem-Dry Business as of the termination date, and an area within a 10-mile radius from the boundary of the Franchised Area.