If a Cr3 American Exteriors franchisee sells the franchise, can they terminate the agreement?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not, during the duration of the Franchise Agreement and for a period of two (2) years after expiration or termination of the Franchise Agreement, in the Territory or within twenty-five (25) miles of the boundaries of the Territory ("Restricted Market"), provide or offer to provide prospective clients services of a similar kind or nature ("Restricted Activities"). For the avoidance of doubt, Restricted Activities include directly or indirectly owning, managing, or providing services to a third party that sells offers or provides a similar service as your Franchised Business. This restriction applies even if you sell your Franchise Business.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 45–48)
What This Means (2025 FDD)
According to the 2025 Cr3 American Exteriors FDD, even if a franchisee sells their franchise business, certain restrictions remain in place. Specifically, for two years after the expiration or termination of the Franchise Agreement, or after selling the franchise, the franchisee is restricted from providing similar services within their territory or within 25 miles of its boundaries. This restriction includes owning, managing, or providing services to a third party that offers similar services to the Cr3 American Exteriors franchise.
This non-compete clause has significant implications for a franchisee considering selling their business. Even after exiting the Cr3 American Exteriors system, the former franchisee cannot immediately engage in a similar business within a defined geographical area. This could limit their future career options or business ventures.
Such restrictions are relatively common in franchising to protect the brand and the existing franchisees from competition by former franchisees who have gained knowledge and experience within the system. Prospective franchisees should carefully consider the scope and duration of these non-compete clauses and how they might affect their future plans before investing in a Cr3 American Exteriors franchise.