Does the non-competition covenant for Counselor Realty franchisees prevent solicitation of employees of Counselor Realty?
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 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 25–29)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, the non-competition covenant does address the solicitation of agents, employees, or independent contractors. Specifically, during the term of the Franchise Agreement, franchisees are prohibited from soliciting any person or entity that is (or was within the previous six months) an agent, employee, or independent contractor of Counselor Realty or another Counselor Realty franchisee. This restriction applies to any such person or entity within the United States and any other geographical area in which Counselor Realty operates. The purpose of this restriction is to prevent franchisees from hiring or contracting these individuals to work for them or any other party, or from inducing them to leave their employment or contract with Counselor Realty or another Counselor Realty franchisee.
After the Franchise Agreement expires, is terminated, or is transferred, this non-solicitation covenant continues for a period of twenty-four (24) months. During this post-term period, the franchisee is still prohibited from soliciting agents, employees, or independent contractors of Counselor Realty or its franchisees. This extended restriction ensures that Counselor Realty and its other franchisees are protected from losing valuable personnel to a former franchisee for a reasonable period after the franchise relationship ends.
This type of non-solicitation clause is common in franchise agreements to protect the franchisor's and other franchisees' investment in recruiting and training personnel. A prospective Counselor Realty franchisee should understand the implications of this restriction, particularly if they plan to operate another real estate business after leaving the Counselor Realty system. They should also consider how this restriction might affect their ability to hire experienced staff or agents if they choose to sell their franchise to a new owner.