What is the geographic scope of the non-compete agreement for a former Cinch I.T. franchisee?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
- (ii) own, manage, maintain, operate, engage in, advise, consult with, invest in, be employed by or perform services as a director, officer, manager, representative, agent, or otherwise, or have any direct or indirect interest in any business within a twenty five (25) mile radius of the Designated Territory of Your former Franchised Business and/or of any CINCH I.T. business owned by any CINCH I.T. franchisee, by Us or any CINCH I.T. affiliate that (a) specializes, in whole or in part, in offering to the public substantially similar products and/or services to those products and/or services offered by Your Franchised Business prior to the termination or expiration of this Agreement (a "Competitive Business") or (b) grants franchises or licenses to others to operate a Competitive Business.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, a former franchisee is restricted from engaging in competitive business activities within a specific geographic area. Specifically, the franchisee cannot own, manage, operate, or be involved with any business that offers substantially similar products or services to those of the Cinch I.T. franchise.
The geographic scope of this restriction extends to a twenty-five (25) mile radius around the Designated Territory of the former Cinch I.T. franchise. This restriction also applies to any Cinch I.T. business owned by another Cinch I.T. franchisee, the franchisor, or any Cinch I.T. affiliate.
This non-compete obligation is in effect upon the termination or expiration of the Franchise Agreement. This means that after the agreement ends, the franchisee is bound by these restrictions. This clause aims to protect Cinch I.T.'s market and other franchisees from direct competition from a former franchisee who has gained knowledge and experience operating within the Cinch I.T. system.