Does the non-compete clause for Counselor Realty apply to passive investments in competing businesses?

According to Counselor Realty's 2025 Franchise Disclosure Document, during the term of the franchise agreement, a franchisee is restricted from owning any interest in a real estate brokerage service business other than Counselor Realty, or one that competes with Counselor Realty, within 50 miles of the franchised office. This restriction applies unless the franchisee obtains prior written approval from Counselor Realty.

This clause means that a Counselor Realty franchisee cannot passively invest in a competing real estate business within the specified geographic area without first getting permission from Counselor Realty. This is a fairly standard restriction in franchise agreements, designed to protect the franchisor's market share and prevent franchisees from benefiting a competitor.

It is important to note that this restriction is in place during the term of the Franchise Agreement. Additionally, after the agreement expires, is terminated, or is transferred, a separate non-solicitation clause prevents the franchisee from soliciting Counselor Realty's agents, employees, or independent contractors for a period of 24 months within the United States and any other geographical area in which Counselor Realty operates.