During the term of the Crawlspace Medic agreement, can a developer participate in a crawlspace or basement service business similar to the Crawlspace Medic system?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
mation 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:
- 8.3.1 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
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;
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 restricted from participating in any crawlspace or basement service business similar to the Crawlspace Medic system. Specifically, the developer cannot act as an owner, partner, director, officer, employee, consultant, or agent in such a business. This restriction applies unless Crawlspace Medic provides written approval otherwise.
This non-compete clause ensures that the developer focuses solely on growing the Crawlspace Medic business and does not use the franchisor's training, trade secrets, and confidential information to benefit a competing business. It also prevents the developer from diverting customers or engaging in activities that could harm the goodwill associated with the Crawlspace Medic brand. This is a fairly standard practice in franchising, as franchisors want to protect their business model and market share.
After the agreement expires or terminates, or if the developer transfers the agreement, a similar non-compete restriction applies for 24 months. During this post-term period, the developer cannot participate in a similar business within 25 miles of the Territory or any Crawlspace Medic location. These restrictions are in place to protect Crawlspace Medic's market and prevent former developers from directly competing using the knowledge and resources gained during their time with the franchise. The FDD states that these restrictions are considered fair and reasonable, given the developer's other skills and opportunities for income.