Does the non-compete agreement apply during the term of the Cinch I.T. franchise agreement?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.2 You covenant that, except as otherwise approved in writing by Us, You shall not, for a continuous uninterrupted period commencing upon the expiration or termination of this Agreement, regardless of the cause for termination, and continuing for two (2) years thereafter, either directly or indirectly, for Yourself or through, on behalf of or in conjunction with any person, persons, partnership or corporation, own, maintain, engage in, be employed by, advise, assist, invest in, franchise, make loans to, or have any interest in any business which is the same as or substantially similar to a CINCH I.T. franchised business and which is located within a radius of twenty-five (25) miles of each Designated Territory described in the Development Area hereunder or within twenty-five (25) miles of the location of any Franchisor-owned, franchisee-owned or affiliate-owned CINCH I.T.
Business under the System which is in existence on the date of expiration or termination of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, section 11.2 outlines the non-compete agreement that applies after the expiration or termination of the agreement. Specifically, for a period of two years after the agreement ends, the franchisee is restricted from engaging in any similar business within a 25-mile radius of their Designated Territory or any existing Cinch I.T. location. This restriction applies regardless of the reason for termination.
However, the FDD excerpt does not explicitly state whether a non-compete agreement is in effect during the term of the Cinch I.T. franchise agreement. The document focuses on the restrictions that apply after the franchise agreement concludes.
Therefore, it is important for a prospective Cinch I.T. franchisee to clarify with the franchisor whether any non-compete obligations exist during the active term of the franchise agreement. Understanding this is crucial for making an informed decision about investing in a Cinch I.T. franchise, as it could impact the franchisee's ability to engage in other business ventures during the franchise term.