After the City Wide Franchise Agreement expires or terminates, for how long is the franchisee restricted from engaging in a competitive business?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Accordingly, Franchisee covenants that, except as otherwise approved in writing by CITY WIDE, Franchisee will not, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly, for himself, or through, on behalf of, or in conjunction with any person, persons, partnership, or corporation, own, maintain, engage in, consult with or have any interest in any business specializing, in whole or in part, in providing the same or similar services or products or activities of any type or nature, targeted at a market of a type the same as or similar to the type of programs offered or provided or markets targeted in or by the System:
- a.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, a franchisee is restricted from engaging in a competitive business for a period of two years after the expiration or termination of the Franchise Agreement. This restriction applies regardless of the reason for termination.
Specifically, the franchisee cannot own, maintain, engage in, consult with, or have any interest in a business that specializes in providing similar services or products to those offered by the City Wide system. This includes targeting the same type of market as City Wide. The non-compete applies to direct or indirect involvement, whether for themselves or in conjunction with others.
City Wide franchisees receive valuable training and confidential information, such as client lists, pricing formulas, business plans, and marketing techniques. The two-year non-compete clause protects this proprietary information and the goodwill of the City Wide brand. This type of restriction is common in franchising to prevent franchisees from using the franchisor's knowledge and resources to unfairly compete after leaving the system.