What happens if a Crawlspace Medic franchisee is dissolved as a business entity?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
18.1. Franchisee's Obligations. Upon termination or expiration of this Agreement, all rights and licenses granted hereunder to Franchisee shall immediately terminate and Franchisee and each Principal, if any, shall:
- 18.1.1. immediately cease to operate the Franchised Business, and shall not thereafter, directly or indirectly identify himself, herself or itself as a current Crawlspace Medic owner, franchisee or licensee;
- 18.1.2. immediately and permanently cease to use the Marks, any imitation of any Mark, Franchisor's designs, copyrighted material or other intellectual property, confidential or proprietary material or ind
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.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
The 2024 Crawlspace Medic Franchise Disclosure Document outlines several obligations that a franchisee must adhere to upon termination or expiration of the franchise agreement, which would include the dissolution of the franchisee's business entity. Upon termination, all rights and licenses granted to the franchisee immediately cease. The franchisee must immediately stop operating the Crawlspace Medic business and cannot identify themselves as a current Crawlspace Medic owner, franchisee, or licensee.
Furthermore, the franchisee is required to immediately and permanently cease using Crawlspace Medic's trademarks, designs, copyrighted material, intellectual property, and any confidential or proprietary information. This prevents the dissolved entity from continuing to benefit from Crawlspace Medic's brand recognition and proprietary assets after the franchise agreement ends.
In addition to these immediate cessation requirements, there are post-termination non-compete obligations. For a period of twenty-four (24) months after termination, the franchisee and its principals are restricted from engaging in any crawlspace or basement service business within twenty-five (25) miles of the former territory or any other Crawlspace Medic location. They are also prohibited from soliciting Crawlspace Medic's employees or taking actions that could harm the goodwill associated with the Crawlspace Medic brand. These restrictions are designed to protect Crawlspace Medic's market position and prevent unfair competition from former franchisees.