Does the City Publications franchise agreement place any geographic limitations on where a Competitive Business can be located to trigger the restrictions on the franchisee?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
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:
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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 within the Exclusive Territory granted to Franchisee, or within a radius of twenty-five (25) miles of any other Franchisor or franchisee-owned CITY PUBLICATIONS Business;
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, a franchisee is restricted from involvement with a Competitive Business. This restriction applies 'anywhere,' meaning there are no geographic limitations on where a Competitive Business can be located to trigger the restrictions on the franchisee.
Specifically, the franchisee cannot own an interest in, manage, operate, be employed by, or act as a consultant to any Competitive Business. This restriction is very broad, covering almost any form of association with a competing business. The FDD defines a 'Competitive Business' as one that sells direct mail advertising or similar services to those offered by City Publications, or one in which confidential information could be used to the disadvantage of City Publications or its franchisees.
After the termination of the franchise agreement, the restrictions change. The franchisee is then restricted from involvement with a Competitive Business within the Exclusive Territory granted to the franchisee, or within a 25-mile radius of any other City Publications franchise. This post-termination restriction lasts for two years. These restrictions are designed to protect City Publications' market share and prevent franchisees from using their knowledge of the City Publications system to compete against it, and the franchisee acknowledges that these restrictions are essential elements of the agreement.