Does the non-compete apply if the Counselor Realty franchisee is acting in any capacity?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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.
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, the non-compete agreement extends to franchisees acting in any capacity after the franchise agreement expires, is terminated, or is transferred. Specifically, for a period of 24 months following the end of the agreement, franchisees are prohibited from soliciting or causing the solicitation of 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.
This means that a former Counselor Realty franchisee cannot, either alone or in conjunction with another entity, attempt to hire or contract individuals associated with Counselor Realty. The restriction applies to individuals who are currently or were, within the previous six months, an agent, employee, or independent contractor of Counselor Realty or another franchisee. The purpose of this clause is to prevent franchisees from poaching talent from the Counselor Realty network to benefit their new ventures.
For a prospective franchisee, this non-compete clause has significant implications. It limits their ability to recruit from the Counselor Realty network should they decide to leave the franchise system. This could pose a challenge if the franchisee wishes to start a competing business and seeks to hire experienced personnel familiar with the real estate market and Counselor Realty's operations. The franchisee should carefully consider the scope and duration of this restriction, as it could impact their future business opportunities.
It is important to note that the non-compete agreement focuses on soliciting employees and contractors, not on preventing a former franchisee from operating a competing business. However, the inability to recruit from the Counselor Realty network could still present a significant hurdle for a former franchisee looking to establish a competing real estate brokerage. Franchisees should seek legal counsel to fully understand the implications of this clause and how it might affect their long-term business plans.