Does Counselor Realty require franchisees to demonstrate compliance with the covenants in Section 7.2?

According to Counselor Realty's 2025 Franchise Disclosure Document, franchisees must demonstrate compliance with the covenants outlined in Section 7.2 of the franchise agreement. These covenants are considered a significant inducement for Counselor Realty to enter into the agreement.

Section 7.2 includes stipulations regarding best efforts, confidentiality, and conflicts of interest. Specifically, franchisees (or their business manager) must dedicate their full time and attention to managing and operating the business. They are also prohibited from disclosing confidential information or trade secrets, and they must ensure their business manager and agents sign confidentiality agreements. Furthermore, during the term of the agreement, franchisees cannot own an interest in or work for any competing real estate brokerage service within 50 miles of their Counselor Realty office without prior written approval.

These requirements extend beyond just the franchisee. According to the FDD, Sections 7.2 (b), (c) and (d) also apply to guarantors of the Franchise Agreement, the franchisee's spouse and children if the franchisee operates as a sole proprietorship, and the officers, directors, employees, partners, and each principal shareholder or owner if the franchisee is a corporation or other entity. This broad application underscores the importance Counselor Realty places on these covenants and their enforcement.