What section of the City Publications franchise agreement contains covenants the franchisee must comply with after termination?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
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:
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, Section 17 of the franchise agreement outlines the restrictive covenants that a franchisee must adhere to both during the term of the agreement and after its termination. Specifically, Section 17B details the restrictions that apply post-termination, which include prohibitions on engaging in competitive businesses within a specified area and soliciting business from former City Publications customers. These restrictions extend for a period of two years after the agreement expires or is terminated, regardless of the reason for termination.
These covenants are designed to protect City Publications' market position and customer relationships. Section 17C emphasizes that these restrictions are considered essential to the agreement, and City Publications would not enter into the agreement without them. The franchisee acknowledges that these terms are fair and reasonable for protecting the franchisor and the franchise system.
Section 17D outlines the remedies available to City Publications in the event of a breach or threatened breach of these covenants. Given the potential for irreparable harm and the difficulty in calculating damages, City Publications is entitled to seek immediate equitable relief, including restraining orders and injunctions, in addition to any other legal or equitable remedies available. This highlights the importance City Publications places on these post-termination restrictions and their commitment to enforcing them.
Prospective franchisees should carefully review Section 17 of the City Publications franchise agreement to fully understand the scope and implications of these restrictive covenants. It is advisable to seek legal counsel to assess the enforceability of these provisions and their potential impact on future business activities after the franchise agreement concludes.