Does the restriction on owning a Competitive Business for City Publications apply to the franchisee's professional staff?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
agers and the spouses of each of the foregoing sign a like restrictive covenant which shall protect both Franchisor and Franchisee. Said covenants shall remain on file at the offices of Franchisee and are subject to audit or review as otherwise set forth herein.
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.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications's 2025 Franchise Disclosure Document, the restriction on owning a Competitive Business applies not only to the franchisee but also to their professional staff. During the term of the agreement, the franchisee, their partners, officers, directors, members, executives, professional staff, sales staff, and their spouses are prohibited from owning an interest in, managing, operating, or being employed by a Competitive Business. This restriction applies to any Competitive Business, regardless of location, unless City Publications provides written approval.
This restriction also extends beyond the termination of the franchise agreement. For a period of two years after the agreement expires or is terminated, the same individuals are restricted from engaging with a Competitive Business within the franchisee's Exclusive Territory or within a 25-mile radius of any other City Publications franchise. This post-term restriction is in place to protect City Publications's market share and confidential information.
These restrictions are considered essential to the franchise agreement, and City Publications emphasizes that it would not enter into the agreement without them. The FDD states that City Publications can seek legal remedies, including injunctions, to prevent any breach of these covenants, highlighting the seriousness with which City Publications views these restrictions. A prospective franchisee should carefully consider these limitations and how they might affect their staff and family members before investing in a City Publications franchise.