Can a Clean Your Dirty Face franchisee serve as a lessor for a Competitive Business?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
Covenantor therefore agrees that for as long as Covenantor is a director or officer of Franchisee and/or will have access to Confidential Information, neither Covenantor nor Covenantor's spouse shall (i) have any direct or indirect interest as a disclosed or beneficial owner in any Competitive Business; or (ii) perform services as a director, officer, member, employee, manager, consultant, lessor, representative, agent or otherwise for any Competitive Business. Covenantor further acknowledges that the restrictions contained in this Section will not hinder his or her activities or those of members of his or her immediate family under this Agreement or in general.
POST-TERM RESTRICTIVE COVENANT. 5.
Upon the first to occur of: (a) termination or expiration without renewal of the Franchise Agreement; or (b) the date as of which Covenantor is neither (i) a director or officer of Franchisee or (ii) an individual who will have access to Confidential Information (each of these events is referred to as a "Termination Event"), Covenantor agrees that for a period of two (2) years
commencing on the effective date of a Termination Event, neither Covenantor nor Covenantor's spouse shall have any direct or indirect interest as a disclosed or beneficial owner in, or assist or perform services as a director, officer, manager, employee, consultant, lessor, representative, agent, or otherwise for, a Competitive Business located or operating within a ten (10-mile radius of the premises of the franchised business operated pursuant to the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Clean Your Dirty Face FDD, during the term of the franchise agreement, a franchisee is restricted from acting as a lessor for a Competitive Business. A "Competitive Business" is defined as any business that offers facials and/or other skincare services, excluding other Clean Your Dirty Face franchises. This restriction applies as long as the franchisee is a director or officer of the franchise or has access to confidential information.
Specifically, the FDD states that neither the franchisee nor their spouse can perform services as a lessor for any Competitive Business while the franchisee is a director or officer, or has access to confidential information. This restriction is in place to protect Clean Your Dirty Face's confidential information and maintain a free exchange of ideas within the franchise system.
After the termination or expiration of the franchise agreement, or when the franchisee no longer serves as a director or officer and does not have access to confidential information, a similar restriction applies for a period of two years. During this post-term period, the franchisee and their spouse are prohibited from acting as a lessor for a Competitive Business within a 10-mile radius of the former Clean Your Dirty Face location. This ensures that former franchisees do not leverage their knowledge of the Clean Your Dirty Face system to benefit a competing business in close proximity to a Clean Your Dirty Face franchise.