Is the Clean Your Dirty Face post-termination non-compete agreement subject to state law?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| (r) Non-competition covenants after the franchise is terminated or expires | Sections 15.F and Section 15.G | For 2 years following the effective date of termination, you and your owners may not have any direct or indirect interest in a Competitive Business located or operating at the Premises or within a 10-mile radius of the Business premises. Additionally, for 2 years you and your owners may not interfere with our or our affiliates or franchisees relationships with any customers, vendors or consultants; and not engage in any other activity injuring the goodwill of the Marks and the Franchise System (subject to state law). |
-
- COVENANT NOT TO COMPETE. Notwithstanding Section 15.F of the Franchise Agreement, any provision that restrains a franchisee from engaging in a lawful trade or business beyond the term of the agreement may be void under California Business and Professions Code Section 16600.
- ILLINOIS FRANCHISE DISCLOSURE ACT. The following language is added to the end of the Franchise Agreement:
Except for the U.S. Federal Arbitration Act and other federal laws in the U.S., the laws of the State of Illinois will govern this Agreement.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–49)
What This Means (2025 FDD)
According to the 2025 Clean Your Dirty Face Franchise Disclosure Document, the enforceability of the post-termination non-compete agreement is subject to state law. Specifically, for franchisees operating in California, the rider to the franchise agreement states that any provision restraining a franchisee from engaging in a lawful trade or business beyond the term of the agreement may be void under California Business and Professions Code Section 16600. This means that the standard non-compete terms outlined in Clean Your Dirty Face's franchise agreement may not be fully enforceable in California, as California law generally disfavors restrictions on post-term business activities.
For Illinois franchisees, the FDD indicates that Illinois law will govern the franchise agreement, except for the U.S. Federal Arbitration Act and other federal laws. While the Illinois Franchise Disclosure Act addresses various aspects of the franchise relationship, the document does not explicitly state whether the post-termination non-compete is subject to Illinois law. However, it does state that no provision can waive compliance with the Illinois Franchise Disclosure Act or any other law of the State of Illinois, to the extent applicable.
This means that a Clean Your Dirty Face franchisee should consult with legal counsel to understand the specific enforceability of the non-compete agreement in their state. The franchisor's standard agreement may be modified or superseded by state laws designed to protect franchisees. Prospective franchisees should pay close attention to any state-specific addenda included in the FDD and seek clarification from Clean Your Dirty Face regarding the application of local laws to the non-compete provisions.