Does the non-solicitation clause in the Christies International Real Estate agreement apply to Principal Owners?
Christies_International_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
ion, proceeding, or dispute that could directly or indirectly affect the Indemnified Parties, the Indemnified Parties have the right, but not the obligation, to: (i) choose counsel; (ii) direct and control the handling of the matter; (iii) settle any claim against the Indemnified Parties; and (iv) seek reimbursement from you pursuant to the terms of this paragraph. This Section will survive the expiration or termination of this Agreement and applies to Indemnification Claims even if they exceed the limits of your insurance coverage.
13. COVENANTS
- 13.1. Non-Solicitation of Customers. You, each Principal Owner, and the Responsible Broker, will not, during the term of this Agreement, and for a period of 1 year after its expiration or termination, directly or indirectly, divert or attempt to divert any CHRISTIE'S INTERNATIONAL REAL ESTATE business, account or customer of the Business or any other CHRISTIE'S INTERNATIONAL REAL ESTATE business referred to you by us, or the System to any competing business including, but not limited to, the competing businesses set forth in Section 6.3(e). We will not during the term of this Agreement, and for a period of 1 year after its expiration or termination, divert or attempt to divert any business, account, client, or customer of yours that we gained knowledge of in connection with this Agreement.
- 13.2. Covenant Not to Compete During Term.
Source: Item 23 — RECEIPT (FDD pages 54–177)
What This Means (2025 FDD)
According to the 2025 Christies International Real Estate Franchise Disclosure Document, the non-solicitation clause applies to Principal Owners. During the term of the Franchise Agreement and for one year after its expiration or termination, Principal Owners are prohibited from directly or indirectly diverting or attempting to divert any Christies International Real Estate business, account, or customer to a competing business. This includes business from the franchisee's own location or any other Christies International Real Estate business referred by the franchisor.
A "Principal Owner" is defined as any person or entity who directly or indirectly owns a 5% or greater interest in the franchisee. If the Principal Owner is a corporation or entity other than a partnership, a Principal Owner also means a shareholder or owner of a 5% or greater interest in that corporation or other entity. If a partnership is a Principal Owner, a Principal Owner also means each general partner of such partnership, and if such general partner is an entity, each owner of a 5% or greater interest in such general partner.
Christies International Real Estate also includes a clause regarding injunctive relief, stating that damages alone may not adequately compensate the franchisor if there is a violation of the non-solicitation covenant. Therefore, Christies International Real Estate is entitled to seek injunctive relief (a court order to stop the prohibited behavior) without needing to post a bond or security. This remedy is in addition to any other legal or equitable remedies available to them. The covenants, including the non-solicitation agreement, survive the termination or expiration of the Franchise Agreement.