After the Crawlspace Medic agreement expires or terminates, for how long is the developer restricted from participating in a similar crawlspace or basement service business?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.3.2 Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, Developer shall not, either directly or indirectly, for himself or herself or through, on behalf of or in conjunction with any person or entity (i) divert, or attempt to divert, any business or customer of Developer's Crawlspace Medic outlets or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; or (ii) participate as an owner, partner, director, officer, employee, consultant or agent or
serve in any other capacity in any crawlspace or basement service business within twenty-five (25) miles of the Territory or any Crawlspace Medic location; or (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (iv) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Crawlspace Medic developers or franchisees.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to the 2024 Crawlspace Medic Franchise Disclosure Document, following the expiration or termination of the agreement, a developer is restricted from participating in a similar crawlspace or basement service business for a period of twenty-four (24) months. This restriction applies within a 25-mile radius of the developer's former territory or any Crawlspace Medic location.
This non-compete clause prevents the developer from diverting business or customers from Crawlspace Medic outlets to a competitor. It also restricts the developer from acting as an owner, partner, director, officer, employee, consultant, or agent in any similar business within the specified geographic area. The clause aims to protect Crawlspace Medic's market share and goodwill by preventing former developers from using the knowledge and experience gained during their franchise term to compete against the brand.
The agreement states that these restrictions are considered reasonable and are designed to protect Crawlspace Medic's interests. However, if any part of the restriction is deemed unreasonable in legal proceedings, the time period or geographic scope may be reduced to make it enforceable. Crawlspace Medic also retains the right to reduce the scope of the covenant at its discretion with written notice to the developer.
It's important to note that violating these non-compete covenants could result in immediate and irreparable harm to Crawlspace Medic, potentially leading to injunctive relief to prevent the developer from engaging in prohibited activities. The existence of any claims the developer may have against Crawlspace Medic does not serve as a defense against the enforcement of these covenants.