Does the definition of 'Competitive Business' for City Publications include QR codes?
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, the definition of a 'Competitive Business' does include QR codes. Specifically, a 'Competitive Business' is defined as any business that sells direct mail advertising or similar services to those offered as part of the City Publications system. This definition extends to businesses where confidential information could be used to the disadvantage of City Publications or its franchisees.
The FDD explicitly states that the term 'Competitive Business' includes, among other things, magazines and any other print ads, internet advertising, email advertising, QR codes, and search engine optimization services. This means that if a franchisee engages in any of these activities outside of their City Publications franchise, it could be considered a breach of the franchise agreement.
This definition is important for prospective franchisees to understand, as it outlines the scope of activities that are considered competitive and therefore restricted. It is common for franchise agreements to include non-compete clauses to protect the franchisor's business model and proprietary information. Franchisees should carefully review this section of the FDD and the franchise agreement to ensure they understand the limitations on their business activities during and after the term of the franchise agreement.