What is the condition regarding the non-competition agreement that City Publications requires from the franchisee and its equity owners?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Restriction During Term of Agreement
Franchisee covenants that, except as otherwise approved in writing by Franchisor, neither Franchisee nor any partner(s), officer(s), director(s), member(s), executives, professional staff or sales staff or the spouses of any of the foregoing shall, during the term hereof, either directly or indirectly, for itself or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other entity:
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- Own an interest in, manage, operate, be employed, in a sales or management capacity, by, or act as a consultant to any Competitive Business anywhere;
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- Initiate any action to hire, or attempt to hire for any other employer, any person who is employed by Franchisor or employed by any other franchisee of the CITY PUBLICATIONS System, or induce any such person to leave his employment with Franchisor or any other franchisee in order to work for any other employer, whether or not the person's employment with the business is pursuant to a written agreement or is at will; or
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- Divert business of customers of the Franchised Business or other Franchisor or franchisee-owned CITY PUBLICATIONS Businesses to any Competitive Business.
B. Restriction After Termination
Franchisee covenants that, except as otherwise approved in writing by Franchisor, neither Franchisee nor any partner(s), officer(s), director(s), member(s), executives, or professional staff or sales staff or their spouses of any of the foregoing shall for a period of two (2) years after the expiration or termination of this Agreement regardless of the cause, either directly or indirectly, for itself or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other entity:
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, during the term of the agreement, the franchisee, along with their partners, officers, directors, members, executives, professional staff, sales staff, and their spouses, are restricted from engaging in activities that compete with City Publications unless explicitly approved in writing by City Publications. This includes direct or indirect involvement with any competitive business.
Specifically, these individuals are prohibited from owning an interest in, managing, operating, or being employed by a competitive business in a sales or management capacity. They are also barred from acting as a consultant to any competitive business. Additionally, they cannot attempt to hire employees of City Publications or its other franchisees, nor can they divert business from City Publications' customers to a competitive business.
After the termination or expiration of the franchise agreement, these restrictions continue for a period of two years. During this time, the franchisee and the aforementioned related parties are still prohibited from engaging in competitive activities, ensuring that they do not leverage their knowledge and experience gained during the franchise term to harm City Publications' business interests. The definition of "Competitive Business" includes businesses selling direct mail advertising or similar services, but excludes ownership of less than 5% of a publicly-traded corporation where similar services are an ancillary product constituting less than 10% of the corporation's gross sales.