Does the Crawlspace Medic agreement prohibit the developer from decreasing the business of the Franchisor or any Crawlspace Medic developers or franchisees?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.3 Noncompetition Covenants.
Developer acknowledges that, pursuant to this Agreement, Developer will receive valuable training, trade secrets and Confidential Information of the System that are beyond the present knowledge, training and experience of Developer.
Developer acknowledges that such specialized training, trade secrets and Confidential Information provide a competitive advantage and will be valuable to him or her in the development and operation of Crawlspace Medic outlets, and that gaining access to such specialized training, trade secrets and Confidential Information is, therefore, a primary reason why Developer is entering into this Agreement.
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 agreement prohibits developers from actions that could harm the Crawlspace Medic business. Specifically, during the term of the agreement, the developer cannot directly or indirectly interfere with, disturb, disrupt, decrease, or otherwise jeopardize the business of Crawlspace Medic, its developers, franchisees, or Franchisor-affiliated outlets. This restriction aims to protect the goodwill associated with the Crawlspace Medic brand and system.
This non-interference clause ensures that developers are committed to supporting the overall Crawlspace Medic network and not engaging in activities that could undermine its success. This includes refraining from actions that could divert customers, damage the brand's reputation, or disrupt the operations of other franchisees or the franchisor.
After the agreement expires or terminates, or upon a transfer, this restriction continues for 24 months. During this period, the developer is prohibited from engaging in similar activities that could harm the Crawlspace Medic business, including working for a competing crawlspace or basement service business within 25 miles of the territory or any Crawlspace Medic location.
The Crawlspace Medic agreement also states that these non-competition covenants are considered fair and reasonable, acknowledging that developers possess other skills and experiences to derive income from other endeavors. If any part of these restrictions is deemed unreasonable, the agreement allows for adjustments to the time period or geographic scope to ensure enforceability.