How does City Publications define a 'Competitive Business'?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Competitive Business" means any business that sells, or grants franchises or licenses to others to operate a business that sells, direct mail advertising or similar services to those offered as part of the CITY PUBLICATIONS System or in which Confidential Information could be used to the disadvantage of Franchisor or its other franchisees; provided, however, that the term "Competitive Business" shall not apply to: (a) any business operated by Franchisee under a Franchise Agreement with Franchisor, or (b) ownership for investment purposes of less than five percent (5%) of the stock of any publicly-traded corporation in which similar services as those offered as part of the System are sold only as an ancillary product, constituting less than ten percent (10%) of the aggregate gross sales of such business. Without limiting the foregoing, "Competitive Business" includes, among other things, magazines and any other print ads, internet advertising, email advertising, QR codes, and search engine optimization services;
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, a 'Competitive Business' is defined as any business that sells, or grants franchises or licenses to others to operate a business that sells, direct mail advertising or similar services to those offered as part of the City Publications system. This definition also includes businesses in which confidential information could be used to the disadvantage of City Publications or its other franchisees.
However, there are exceptions to this definition. A 'Competitive Business' does not include any business operated by a franchisee under a Franchise Agreement with City Publications. Additionally, it excludes ownership for investment purposes of less than five percent of the stock of any publicly-traded corporation where similar services are sold only as an ancillary product, constituting less than ten percent of the aggregate gross sales of such business.
The definition explicitly includes, but is not limited to, magazines and any other print ads, internet advertising, email advertising, QR codes, and search engine optimization services. This broad definition is important for prospective franchisees to understand, as it outlines the types of businesses or activities that could be considered competitive and therefore restricted under the franchise agreement.