What is the impact of my spouse's affiliation with the Closet Storage Concepts franchisee on my obligations?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
to any third party, nor store it on any personal or third-party electronic device, disk, drive, or otherwise, unless expressly authorized to do so by the Franchisor.
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- Any work performed by me during my spouse's affiliation with Franchisee in relation to Closet & Storage Concepts or the Franchise Agreement and any derivative works created by me using the Confidential Information or any proprietary information of the Franchisor are considered "works made for hire" and I will have no ownership interest in the items created.
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- The Confidential Information is proprietary, involves trade secrets of the Franchisor, and is disclosed to me solely on the condition that I agree, and I do hereby agree, that I shall hold in strict confidence all Confidential Information. Unless the Franchisor otherwise agrees in writing, I will disclose and/or use the Confidential Information only in connection with assistance provided by me to the Franchisee, and will continue not to disclose or use any such information even after my spouse ceases to be affiliated with Franchisee, unless I can demonstrate that such information has become generally known to the public or easily accessible other than by the breach of an obligation of Franchisee under the Franchise Agreement, a breach of the employees or associates of Franchisee, or a breach of my own duties or the duties hereunder.
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- Except as otherwise approved in writing by the Franchisor, I shall not, during my spouse's association with the Franchisee, either directly or indirectly for myself, or through, on behalf of, or in conjunction with any person, persons, partnership, or corporation (i) own, maintain, engage in, be employed by, or have any interest in any other business which offers services competitive with those sold or offered under the Closet & Storage Concepts or More Space Place System (a "Competing Business"); or (ii) own, maintain, engage in, be employed by or have any interest in any company that grants licenses or franchises for a Competing Business. Further, for a continuous uninterrupted period commencing upon the expiration or termination of the Franchise Agreement or my spouse's affiliation with the Franchisee (whichever occurs first), regardless of the cause for termination, and continuing for two (2) years, I shall not either directly or indirectly, for myself or through, on behalf of, or in conjunction with any person, persons, partnership, or corporation, (i) own, maintain, engage in, be employed by or have any interest in a Competing Business within the Territory or a radius of 20 miles from the Territory or any Closet & Storage Concepts or More Space Place company owned or franchised business in operation or for which a franchise agreement has been signed; (ii) own, maintain, engage in, be employed by or have any interest in any company that grants licenses or franchises for a Competing Business; (iii) solicit business from customers of Franchisee's former Franchised Business for any competitive business purpose; or (iv) solicit any employee of Franchisor or any other Closet & Storage Concepts or More Space Place System franchisee to discontinue his or her employment.
The prohibitions in this Paragraph 7 do not apply to my spouse's continuing interests in or activities performed in connection with a Franchised Business that is still in operation.
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- I agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to the 2025 Closet Storage Concepts FDD, as the spouse of a franchisee, you are bound by certain obligations and restrictions, particularly regarding confidential information and non-competition. During your spouse's association with the franchisee, you cannot engage in any business that competes with Closet Storage Concepts or any company that licenses or franchises a competing business, unless you obtain written approval from Closet Storage Concepts. This restriction prevents you from directly or indirectly undermining the franchise while your spouse is actively involved.
Even after your spouse's affiliation with the Closet Storage Concepts franchise ends, you are still obligated to maintain the confidentiality of proprietary information. You can only disclose or use confidential information in connection with assisting the franchisee, and this obligation continues even after your spouse is no longer affiliated with the franchise. The only exception is if the information becomes publicly known through means other than a breach of the franchise agreement or your own duties. This ensures that sensitive business information remains protected, even after your spouse's involvement ceases.
Furthermore, for a period of two years after the termination or expiration of the franchise agreement or your spouse's affiliation (whichever comes first), you are restricted from engaging in any competing business within the territory or within a 20-mile radius of the territory. This restriction also applies to any Closet & Storage Concepts or More Space Place company-owned or franchised business. This non-compete clause prevents you from leveraging knowledge gained during your spouse's affiliation to start a competing venture shortly after the franchise relationship ends. However, these prohibitions do not apply to your spouse's continuing interests in or activities performed in connection with a franchised business that is still in operation, providing an exception for ongoing, legitimate business activities.
Closet Storage Concepts also retains the right to modify the scope of any covenant set forth in the agreement without your consent, effective immediately upon written notice. This gives Closet Storage Concepts flexibility to adjust the restrictions as needed. Additionally, Closet Storage Concepts is a third-party beneficiary of the agreement and can enforce it jointly or solely with the franchisee, meaning they can take direct action if you violate the agreement. Understanding these obligations is crucial before your spouse enters into a Closet Storage Concepts franchise agreement, as your actions can have significant legal and financial implications.