What are the non-competition covenants after the Counselor Realty franchise is terminated or expires?
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, after the franchise agreement expires or is terminated, there are specific non-competition covenants that apply to the franchisee. Specifically, for a period of 24 months after the agreement expires, is terminated, or is transferred, the franchisee is restricted 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 within the United States and any other geographical area in which Counselor Realty operates.
This means a former franchisee cannot actively seek to hire or contract with current or recent personnel from Counselor Realty or its other franchisees. The purpose is to prevent franchisees from poaching talent and disrupting the Counselor Realty network. This post-term non-solicitation clause is a fairly standard practice in franchising to protect the franchisor's and other franchisees' investments in recruiting and training staff.
It is important to note that the non-compete clause does not prevent a former agent, employee, or independent contractor from independently seeking employment or contract work with a former franchisee. It only restricts the former franchisee from actively soliciting them. A prospective franchisee should fully understand the scope and limitations of this non-solicitation covenant, as violating it could lead to legal repercussions.