Does the Crawlspace Medic agreement prohibit the Developer from attempting to divert customers of other developers or franchisees in the System?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
In consideration for such specialized training, trade secrets, Confidential Information and rights, Developer covenants that, except as otherwise approved in writing by Franchisor:
8.3.1 During the term of this Agreement, 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 the Developer's Crawlspace Medic outlets or of other developers or franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (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 similar to the System; 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 or Franchisoraffiliated outlets.
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
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to the 2024 Crawlspace Medic Franchise Disclosure Document, the Developer is restricted from diverting or attempting to divert business or customers from other developers or franchisees within the Crawlspace Medic system. During the term of the agreement, the developer cannot directly or indirectly attempt to move customers to a competitor. This restriction is in place to protect the competitive advantage created by the specialized training, trade secrets, and confidential information provided to the Developer.
This non-competition covenant extends beyond the agreement term. For twenty-four months after the agreement expires or terminates, the Developer is prohibited from diverting or attempting to divert customers of their Crawlspace Medic outlets or other franchisees in the system to any competitor. This post-term restriction also prevents the Developer from participating in a similar crawlspace or basement service business within twenty-five miles of the Territory or any Crawlspace Medic location.
The Crawlspace Medic agreement states that these restrictions are considered fair and reasonable, acknowledging the Developer's other skills and experiences that allow them to earn income from other sources. If any of the restrictions are deemed unreasonable, they can be reduced in time or scope to ensure enforceability. Crawlspace Medic also retains the right to modify the scope of these covenants.
Furthermore, the agreement emphasizes that violating these non-competition covenants would cause immediate and irreparable harm to Crawlspace Medic, potentially leading to injunctive relief. The existence of any claims the Developer may have against Crawlspace Medic does not serve as a defense against the enforcement of these covenants.