What post-term covenants is a Cr3 American Exteriors franchisee required to adhere to?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
you is more than thirty (30) days past due.
8.5. No Refund of Initial Fee
We have no obligation to return or refund any fee to you upon termination or expiration of this Agreement.
8.6. Post Termination Obligations
If this Agreement expires, is not renewed, or is terminated for any reason by any party, including a sale of the Franchised Business, you must immediately:
a) Assist and cooperate in the orderly transfer of the Franchised Business as directed by us and;
b) Deliver to us the original and all copies, both paper and electronic, of the business records of your Franchised Business (retaining only such copies as you need for legal or tax purposes);
c) Pay to us all amounts owing to us;
d) At our request, cancel or assign to us all telephone numbers under your ownership used in the Franchised Business;
e) Reimburse customers for any fees paid for services not yet rendered;
f) At our option, and upon our request, use your best efforts to assist in our taking over the lease of the location of your Franchised Business, whether it be through a new lease or assignment;
g) Deliver to us any paper and electronic copies of the Manuals and any Confidential Information;
h) Cancel all fictitious name or other listings which you have filed for use of any of the Marks;
i) Adhere to the provisions of the post-term covenants not to compete and not to solicit;
j) Abide by any other covenant in this Agreement that requires performance by you after you are no longer a franchisee; and
k) Execute, from time to time, any necessary papers, documents, and assurances to effectuate the intent of this Section**.**
8.7. Non-Compete and No Solicitation
A. In-Term and Post-Term.
You will not, during the Term and for a period of two (2) years after expiration or termination of this Agreement ("Restriction Period"), in the Territory or within twenty-five (25) miles of the boundaries of the Territory ("Restricted Market"), provide o
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
According to the 2025 FDD, Cr3 American Exteriors franchisees face several post-term covenants upon expiration or termination of their franchise agreement. These include non-compete and non-solicitation clauses that extend for a specified period after the agreement ends. Specifically, franchisees are restricted from engaging in similar business activities within their territory or a 25-mile radius of its boundaries for two years after the agreement's termination.
Additionally, franchisees must assist in transferring the business, provide business records, settle outstanding payments, and, if requested, transfer telephone numbers used for the franchise. They are also obligated to reimburse customers for unrendered services, assist in lease transfers, return manuals and confidential information, and cancel any fictitious name listings associated with the brand.
Furthermore, franchisees must adhere to all provisions within the agreement that require performance even after they are no longer a franchisee and execute any necessary documents to fulfill the agreement's intent. These measures ensure the protection of Cr3 American Exteriors's business interests and proprietary information, preventing former franchisees from leveraging their knowledge and resources to compete unfairly or undermine the brand's reputation.
It is important to note that the enforceability of non-compete clauses can vary by state. For example, the FDD mentions that in California, such provisions extending beyond the termination of the agreement may not be enforceable under California law. Prospective franchisees should consult with legal counsel to understand the specific implications and enforceability of these covenants in their respective jurisdictions.