During the term of the franchise, where is a Cinch I.T. franchisee prohibited from involvement with a competing business?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
18 and 21 | Federal Arbitration Act and | | | Choice of law | | Massachusetts law applies (subject to state law). | |
FRANCHISE AGREEMENT
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| a. Length of the franchise | Section 5 | Term is 5 years. |
| term | ||
| b. Renewal or extension of the term | Section 6 | If you are in good standing, you can renew for 3 successive 5 year terms. |
| c. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 48–56)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, during the term of the franchise agreement, a franchisee is prohibited from any involvement with a competing business anywhere in the United States. This restriction is subject to state law, meaning that specific state regulations may modify or limit the enforceability of this non-compete covenant.
This non-compete clause prevents Cinch I.T. franchisees from simultaneously operating or being involved in any competing business within the United States while they are still a franchisee. This is designed to protect Cinch I.T.'s market share, trade secrets, and customer relationships.
Prospective franchisees should be aware of this broad restriction and carefully consider its implications for any current or future business ventures they may have. It is important to consult with legal counsel to understand how state law may affect the enforceability of this clause in their specific location. Franchisees should also consider that after the franchise term, a more limited non-compete applies for two years within a 25-mile radius.