What is the duration of the non-competition covenant for Cinch I.T. after the franchise is terminated or expires?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| r. Non-competition covenants after the franchise is terminated or expires | Sections 27 and 35 | Two year and 25 mile radius restriction on competing business. Permanent restriction on using licensed rights (subject to state law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 48–56)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, if the franchise is terminated or expires, the franchisee is subject to a non-competition covenant. This covenant includes two components: a restriction on engaging in a competing business for two years within a 25-mile radius, and a permanent restriction on using licensed rights.
The two-year, 25-mile radius restriction means that after the franchise agreement ends, the former franchisee cannot own, operate, or be involved with a competing business within that geographic area for two years. This is designed to protect Cinch I.T.'s market share and prevent former franchisees from using the brand's confidential information or business model to compete against them in the immediate area.
The permanent restriction on using licensed rights means that the former franchisee can never use Cinch I.T.'s trademarks, service marks, or other intellectual property, regardless of location or time. This protects Cinch I.T.'s brand identity and prevents former franchisees from trading on the brand's reputation after the franchise agreement has ended. Both of these restrictions are subject to state law, which means that the enforceability and specific terms may vary depending on the state in which the franchise operates.