factual

What does the Crawlspace Medic franchisee agree to regarding the restrictions and procedures of the System?

Crawlspace_Medic Franchise · 2024 FDD

Answer from 2024 FDD Document

) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Crawlspace Medic franchisees or Franchisor-affiliated outlets.

  • 19.5.2. Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, Franchisee and Principals, if any, shall not, either directly or indirectly, for themselves 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 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) seek to employ any person who is at that time employed by Franchisor or otherwise induce such person to leave his or her employment or (iv) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (v) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Crawlspace Medic franchisees.
  • 19.6. Reasonableness of Restrictions. Franchisee and each Principal, if any, acknowledges and agrees that the covenants not to compete set forth in this Agreement are fair and reasonable and will not impose any undue hardship on Franchisee or Principals, if any, since Franchisee or Principals, as the case may be, have other considerable skills, experience and education which afford Franchisee or Principals, as the case may be, the opportunity to derive income from other endeavors.
  • 19.7. Reduction of Time or Scope. If the period of time or the geographic scope specified 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 Paragraph 19 or any portion thereof, without Franchisee's consent, effective immediately upon receipt by Franchisee of written notice thereof, and Franchisee agrees to forthwith comply with any covenant as so modified.
  • 19.8. Injunctive Relief. Franchisee and each Principal, if any, acknowledges that a violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to Franchisor for which no adequate remedy at law will be available. Accordingly, Franchisee and each Principal, if any, hereby consents to the entry of an injunction prohibiting any conduct by

  • Franchisee or any Principal in violation of the terms of the covenants not to compete set forth in this Agreement.
  • 19.9. No Defense. Franchisee and each Principal, if any, expressly agree that the existence of any claims they may have against Franchisor, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by Franchisor of the covenants in this Section.
  • 19.10. Covenants of Employees, Agents and Third Persons. Franchisee shall require and obtain execution of covenants similar to those set forth in this Section (including covenants applicable upon the termination of a person's employment with Franchisee) from all employees, contractors or third persons that will have access to Franchisor's confidential and proprietary information. Such covenants shall be substantially in the form set forth in Attachment 6 as revised and updated from time to time and contained in the Manual.

20. DISPUTE RESOLUTION

  • 20.1. Internal Dispute Resolution. Franchisee shall first bring any claim, controversy or dispute arising out of or relating to this Agreement, the Attachments hereto or the relationship created by this Agreement to Franchisor's president and/or chief executive officer for resolution.

Source: Item 22 — CONTRACTS (FDD page 42)

What This Means (2024 FDD)

According to the 2024 Crawlspace Medic FDD, franchisees face several restrictions and must adhere to specific procedures to protect the brand and system. After the agreement ends, the franchisee cannot divert business from Crawlspace Medic to competitors, nor can they work for a competing crawlspace or basement service business within 25 miles of their territory or any Crawlspace Medic location for 24 months. Franchisees also agree not to employ anyone currently working for Crawlspace Medic or act in any way that harms the goodwill associated with the brand. These restrictions are acknowledged as fair and reasonable, considering the franchisee's other skills and opportunities for income. However, if any restriction is deemed unreasonable, its scope or duration may be reduced to what is enforceable.

Crawlspace Medic franchisees must also ensure that anyone working for them (referred to as "Covenantor") complies with these restrictions. The franchisee is responsible for the actions of their employees and must take steps to prevent them from disclosing confidential information or competing unfairly. This includes preventing employees from diverting business, working for competitors, or engaging in activities that could harm Crawlspace Medic's reputation. The agreement emphasizes that any breach of these covenants would cause irreparable harm to Crawlspace Medic, justifying legal remedies like injunctions.

Furthermore, Crawlspace Medic retains significant rights regarding the system. They can purchase, merge with, or acquire other franchise networks, even if those businesses compete with existing franchisees. While Crawlspace Medic states they will not convert acquired facilities within a franchisee's territory to a Crawlspace Medic franchise during the agreement term, the franchisee acknowledges that Crawlspace Medic can operate these other businesses under different brands. Franchisees must also use specified software (like Vonigo) and maintain adequate internet access to communicate with Crawlspace Medic. These provisions highlight the importance of adhering to Crawlspace Medic's standards and protecting the brand's integrity, even amidst changes to the broader business landscape.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.