What happens if a Counselor Realty franchisee violates the non-solicitation agreement?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
fice or Extension Office) without Counselor's prior written approval.
- (d) During the term of this Agreement and for a period of twenty-four (24) months after it expires, is terminated or is transferred, you will not alone, or in any capacity
with another person or entity, within the United States and any other geographical area in which Counselor operates, solicit or cause to be solicited any person or entity that is (or was within the previous six (6) months) an agent, employee or independent contractor of Counselor or another Counselor franchisee, for the purpose of hiring or contracting such person or entity to work for you or any other party, or for the purpose of inducing them to leave such party's employment or contract with Counselor or another Counselor franchisee.
- (e) You agree that the covenants contained in this Section 7.2 are reasonable and understand that your willingness to agree to such covenants is an important inducement and consideration for our entering into this Agreement. You must demonstrate compliance with this Section 7.2. Sections 7.2 (b), (c) and (d) also apply to guarantors of this Agreement, your spouse and children if Franchisee is a sole proprietorship, and your officers, directors, employees, partners, and each principal shareholder or owner if Franchisee is a corporation or other entity.
- 7.3 Inspection. Your Business and Office (including any Additional Office and Extension Office) shall be open to us for inspection without notice during the business day.
- 7.4 Agents.
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
The 2025 Counselor Realty Franchise Disclosure Document outlines the repercussions for violating the non-solicitation agreement. During the term of the Franchise Agreement and for 24 months after the agreement expires, is terminated, or is transferred, a franchisee is prohibited from soliciting any agent, employee, or independent contractor of Counselor Realty or another Counselor Realty franchisee. This restriction applies within the United States and any other geographical area in which Counselor Realty operates. The purpose of this is to prevent franchisees from hiring or contracting these individuals to work for them or inducing them to leave their current employment or contract with Counselor Realty.
If a Counselor Realty franchisee breaches the non-solicitation agreement, it could be considered a material breach of the Franchise Agreement. According to section 11. Termination, Counselor Realty may terminate the agreement for good cause if the franchisee performs any intentional, material, repeated, or continuous breach of the agreement. In such a case, Counselor Realty must provide the franchisee with 60 days' written notice of termination, specifying the cause. The franchisee then has 30 days from the delivery of the notice to cure the breach, unless the breach involves non-payment of sums due, in which case the cure period is seven days. If the franchisee fails to cure the breach within the allotted time, the Franchise Agreement will terminate at the end of the 60-day notice period.
Additionally, the FDD states that termination or expiration of the Franchise Agreement does not eliminate post-termination obligations, including the non-solicitation obligations outlined in Section 7.2(d). This means that even after the agreement ends, the franchisee remains bound by the non-solicitation clause for the specified 24-month period. Therefore, violating the non-solicitation agreement can lead to termination of the franchise and continued legal obligations even after the franchise relationship has ended.