Does payment of liquidated damages by a Chem Dry franchisee release them from the obligations of the non-compete agreement?

According to Chem Dry's 2024 Franchise Disclosure Document, payment of liquidated damages does not release a franchisee from the obligations of the non-compete agreement. The FDD states that the franchisee acknowledges that the non-compete covenant is independent and separate from the obligation to pay liquidated damages.

The Chem Dry franchise agreement specifies that even if a franchisee pays liquidated damages, they and their owners must still comply with the non-compete restrictions outlined in Section 16.D of the agreement. This means that even after termination and payment of damages, the franchisee is still restricted from competing with Chem Dry for a specified period.

This provision protects Chem Dry's market position and customer relationships by preventing former franchisees from using the knowledge and experience gained while operating a Chem Dry business to directly compete against the franchisor. Franchisees should carefully consider the implications of both the liquidated damages and non-compete clauses before entering into an agreement.