During the term of the Crawlspace Medic agreement, is a developer allowed to disrupt the business of other Crawlspace Medic franchisees?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
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, during the term of the agreement, a developer is prohibited from disrupting the business of other Crawlspace Medic franchisees. The agreement states that the developer cannot "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." This restriction is part of the noncompetition covenants that the developer agrees to in exchange for receiving valuable training, trade secrets, and confidential information from Crawlspace Medic.
This provision protects the Crawlspace Medic brand and its franchisees by preventing developers from engaging in activities that could harm the business of other franchisees within the system. This includes actions that could divert customers, decrease revenue, or damage the goodwill associated with the Crawlspace Medic brand. The non-compete terms apply not only to the developer's own Crawlspace Medic outlets but also to other developers and franchisees within the Crawlspace Medic system.
After the agreement expires or terminates, the developer is still restricted from disrupting the business of Crawlspace Medic for a period of twenty-four months. During this post-term period, the developer cannot interfere with, disturb, disrupt, decrease, or otherwise jeopardize the business of Crawlspace Medic, its developers, or franchisees. These restrictions are designed to protect Crawlspace Medic's market position and the investments made by its franchisees.
Crawlspace Medic also emphasizes the reasonableness of these restrictions, stating that they are fair and do not impose undue hardship on the developer, as the developer has other skills and experience to derive income from other endeavors. If any restriction is deemed unreasonable, its scope can be reduced to ensure enforceability. The agreement also acknowledges that violating these non-compete covenants would cause immediate and irreparable injury to Crawlspace Medic, allowing for injunctive relief to prevent such violations.