What is the exception to the non-compete agreement for the Signer of the Cinch I.T. franchise agreement?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
Except to the extent prohibited by the laws of the state where the Franchised Business is located or where the Signer lives, in order to protect the goodwill and unique qualities of CINCH I.T.
SYSTEM and the confidentiality and value of Franchisor's Trade Secrets, and in consideration for the disclosure to Signer of Franchisor's Trade Secrets, Signer further undertakes and covenants that, during the time Franchisee is a franchisee of Franchisor and for the two (2) years following the termination or expiration of Franchisee's Franchise Agreement, Signer will not:
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, there is an exception to the non-compete agreement for the Signer. The Signer, typically a spouse or domestic partner of the franchisee, agrees to certain restrictions to protect Cinch I.T.'s goodwill and trade secrets. However, this agreement is not absolute.
The exception to the non-compete is that the restrictions do not apply to the extent prohibited by the laws of the state where the franchised business is located or where the Signer lives. This means that if state law does not allow for such restrictive covenants, or only allows them under specific conditions that are not met, the Signer may not be bound by the non-compete agreement.
This exception is important for prospective franchisees and their spouses to understand, as the enforceability of the non-compete agreement can vary significantly depending on the jurisdiction. It is advisable to seek legal counsel to understand the specific laws in their state and how they may impact the enforceability of the spousal non-compete agreement.