What constitutes a 'Competing Business' for Closet Storage Concepts franchisees during the term of the agreement?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
6.4.1 During the Term of This Agreement. During the term of this Agreement, neither Franchisee, nor its equity owners shall, directly or indirectly, for itself or through, on behalf of, or in conjunction with any other person, partnership or corporation own, maintain, engage in, be employed by, or have any interest in any other business which offers or sells products or services competitive with those sold or offered under the Closet & Storage Concepts System or the More Space Place System (a "Competing Business").
During the term of this Agreement, regardless of the cause, neither Franchisee, nor its equity owners shall, directly or indirectly, for itself or through, on behalf of, or in conjunction with any other person, partnership or corporation own, maintain, engage in, be employed by, or have any interest in any company which grants franchises or licenses for any business competing in whole or in part with Franchisor.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, a 'Competing Business' during the term of the franchise agreement is defined as any business that offers or sells products or services that are competitive with those sold or offered under the Closet & Storage Concepts System or the More Space Place System. This non-compete clause extends not only to the franchisee but also to their equity owners.
Specifically, neither the franchisee nor their equity owners can directly or indirectly own, maintain, engage in, be employed by, or have any interest in such a competing business. This restriction applies whether the involvement is for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation.
Furthermore, during the term of the agreement, franchisees and their equity owners are also prohibited from having any interest in any company that grants franchises or licenses for any business that competes, in whole or in part, with Closet Storage Concepts. This is a fairly standard non-compete arrangement in franchising, designed to protect the brand and the franchise system from internal competition.