What are the restrictions on operating a competing business after the Cinch I.T. 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, there are post-term non-compete restrictions. After the franchise is terminated or expires, a franchisee is restricted from engaging in a competing business within a 25-mile radius for two years.
Additionally, the franchisee faces a permanent restriction on using Cinch I.T.'s licensed rights after the franchise term. These restrictions are subject to state law, meaning the enforceability and specific terms may vary depending on the franchisee's location.
These non-compete terms are typical in franchising to protect the brand and business model. Prospective Cinch I.T. franchisees should carefully consider these restrictions, as they could impact their ability to work in the same industry after leaving the franchise system. It is advisable to seek legal counsel to understand the specific implications of these covenants in their state.