Does the post-termination restriction for City Publications extend to the franchisee's partners, officers, directors, members, executives, professional staff, sales staff, or their spouses?
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, 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;
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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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- Solicit business from customers of Franchisee's former CITY PUBLICATIONS business or other Franchisor or franchisee-owned CITY PUBLICATIONS Businesses.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the post-termination restrictions extend beyond just the franchisee. Specifically, the agreement states that these restrictions apply to the franchisee and also to any partners, officers, directors, members, executives, professional staff, sales staff, and their spouses. This means that all of these individuals are subject to the non-compete and non-solicitation clauses for a period of two years after the franchise agreement expires or is terminated.
This provision has significant implications for a prospective City Publications franchisee. It means that if you are a franchisee, not only are you restricted from engaging in a competitive business or soliciting customers and employees, but these restrictions also apply to a wide range of people associated with you and your business. This could limit the future employment or business opportunities of these individuals, even if they were not directly involved in the operation of the City Publications franchise.
The restrictions apply for a period of two years after the agreement ends, regardless of the reason for termination. The restrictions limit these individuals from owning, managing, operating, or being employed by any competitive business within the franchisee's exclusive territory or within a 25-mile radius of any other City Publications franchise. They are also prohibited from soliciting employees or customers of the former City Publications business or other City Publications franchises.
Given the breadth of individuals covered by these post-termination restrictions, a prospective franchisee should carefully consider the potential impact on themselves, their business partners, employees, and even their family members. It would be prudent to seek legal counsel to fully understand the scope and enforceability of these restrictions in their specific jurisdiction.