What happens to obligations of the Developer after termination, expiration, or transfer of the Crawlspace Medic agreement?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.1 Confidential Information. Developer acknowledges and accepts that during the term of this Agreement, Developer will have access to Franchisor's trade secrets, including, but not limited to, methods, processes, customer lists, vendor partnerships and/or relationships, sales and technical information, financial information, costs, product prices and names, software tools and applications, website and/or email design, products, services, equipment, technologies and procedures relating to the operation of a Crawlspace Medic outlet; the Manual; methods of advertising and promotion; instructional materials; any other information which Franchisor may or may not specifically designate as "confidential" or "proprietary"; and the components of the System, whether or not such information is protected or protectable by patent, copyright, trade secret or other proprietary rights (collectively referred to herein as the "Confidential Information"). Developer shall not, during the term of this Agreement and thereafter,
communicate or divulge to, or use for the benefit of, any other person or entity, and, following the expiration or termination of this Agreement, shall not use for Developer's own benefit, any Confidential Information that may be communicated to Developer or of which Developer may be apprised in connection with the development of Crawlspace Medic outlets under the terms of this Agreement. Developer shall not at any time copy, duplicate, record or otherwise reproduce any Confidential Information, in whole or in part, or otherwise make the same available to any person, without Franchisor's prior written consent. The covenant in this Section 8.1 shall survive the expiration, termination or transfer of this Agreement or any interest herein and shall be perpetually binding upon Developer.
- 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:
- 8.3.2 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 has ongoing obligations even after the agreement terminates, expires, or is transferred. Specifically, the developer is bound by non-disclosure and non-competition covenants that restrict their activities.
The non-disclosure covenant mandates that the developer must not communicate, divulge, or use any confidential information related to the Crawlspace Medic system for their own or another's benefit, even after the agreement ends. This includes trade secrets, methods, customer lists, vendor partnerships, sales and technical data, financial information, software, and other proprietary details. This obligation is perpetual, meaning it continues indefinitely, and the developer cannot copy or reproduce any confidential information without Crawlspace Medic's prior written consent.
Additionally, the non-competition covenant restricts the developer from engaging in activities that could harm Crawlspace Medic. For a period of 24 months after the agreement's termination, expiration, or transfer, the developer cannot divert business or customers from Crawlspace Medic outlets, participate in any crawlspace or basement service business, or perform any action that is injurious to the goodwill associated with the Crawlspace Medic marks and system. These restrictions aim to protect Crawlspace Medic's competitive advantage and market position.
These post-termination obligations highlight the importance of understanding the full scope of the agreement before entering into a Crawlspace Medic development arrangement. Prospective developers should carefully consider these long-term restrictions and how they might impact their future business endeavors.