During employment with a Crawlspace Medic franchisee, can a Covenantor participate in a crawlspace or basement service business similar to the Crawlspace Medic system, and if so, under what conditions?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
a. In order to protect the goodwill and unique qualities of the System, and in consideration for the disclosure to Covenantor of the Confidential Information, Covenantor further agrees and covenants that during Covenantor's employment or association with Franchisee, Covenantor shall not, for Covenantor 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 Crawlspace Medic system or of other 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 substantially similar to the System.
b. In further consideration for the disclosure to Covenantor of the Confidential Information and to protect the goodwill and unique qualities of the System, Covenantor further agrees and covenants that, upon the termination of Covenantor's employment or association with Franchisee and continuing for twenty-four (24) months thereafter, Covenantor shall not, for Covenantor 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 Franchised Business or of other franchisees in the Crawlspace Medic System to any competitor, by direct or indirect inducement or otherwise,
(ii) participate as an owner, partner, director, officer, employee, or consultant or serve in any other managerial, operational or supervisory capacity in any crawlspace or basement service business within the within twenty-five (25) miles of Franchisee's Territory or any Crawlspace Medic location.
c. The parties acknowledge and agree that each of the covenants contained herein are reasonable limitations as to time, geographical area, and scope of activity to be restrained and do not impose a greater restraint than is necessary to protect the goodwill or other business interests of Franchisor.
d. If the period of time or the geographic scope specified Section 2.b. above, should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable.
In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement or any portion thereof, without Covenantor's or Franchisee's consent, effective immediately upon receipt
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to the 2024 Crawlspace Medic Franchise Disclosure Document, a Covenantor (employee) is restricted from participating in a crawlspace or basement service business substantially similar to the Crawlspace Medic system during their employment or association with a franchisee. This restriction is in place to protect the goodwill and unique qualities of the Crawlspace Medic system, as well as to safeguard the confidential information disclosed to the Covenantor.
The Covenantor is prohibited from diverting or attempting to divert any business or customer of the Crawlspace Medic system to any competitor, either directly or indirectly. They are also barred from participating as an owner, partner, director, officer, employee, consultant, or agent in any crawlspace or basement service business that is substantially similar to the Crawlspace Medic system during their term of employment.
Upon termination of employment or association with the Crawlspace Medic franchisee, the Covenantor is further restricted for a period of twenty-four (24) months. During this time, they cannot divert business or customers to competitors or participate in a similar business within twenty-five (25) miles of the franchisee's territory or any Crawlspace Medic location. These restrictions are acknowledged as reasonable to protect the goodwill and business interests of Crawlspace Medic.
Crawlspace Medic also retains the right to reduce the scope of any covenant set forth in the agreement without the Covenantor's or franchisee's consent, effective immediately upon written notice to the Covenantor. The franchisee is responsible for ensuring that the Covenantor complies with the agreement, and any breach by the Covenantor would cause irreparable injury to Crawlspace Medic, entitling them to legal remedies.