Does the Closet Storage Concepts non-compete apply if the agreement is transferred?

According to Closet Storage Concepts' 2025 Franchise Disclosure Document, the non-competition provisions of the franchise agreement survive the transfer of the franchise. This means that even if a franchisee sells or transfers their Closet Storage Concepts franchise to a new owner, the original franchisee remains bound by the non-compete agreement.

Specifically, after the transfer of the agreement, the original franchisee is still restricted from engaging in any Competing Business within the Territory or a 20-mile radius, or any other Closet & Storage Concepts or More Space Place company owned or franchised business. This restriction lasts for a period of 2 years after the transfer. The franchisee also cannot solicit business from customers of their former Franchised Business for any competitive business purpose nor solicit any employee of Closet Storage Concepts or More Space Place.

To ensure the enforceability of these provisions, Closet Storage Concepts, the franchisee, and the transferee must enter into a transfer agreement in a form approved by Closet Storage Concepts. This transfer agreement likely outlines the specific terms and conditions of the transfer, including the continued applicability of the non-compete clause. This is a standard practice in franchising to protect the brand and other franchisees in the system.

This provision protects Closet Storage Concepts' interests by preventing a former franchisee from immediately opening a competing business nearby and leveraging the knowledge and customer relationships gained during their time as a franchisee. Prospective franchisees should carefully consider the implications of this non-compete agreement, especially if they plan to eventually sell their franchise.