During the term of the Crawlspace Medic franchise, can I participate in a competing business as an investor?

According to Crawlspace Medic's 2024 Franchise Disclosure Document, during the term of the franchise agreement, you are restricted from participating in a competing business in any capacity, including as an investor. Specifically, you cannot divert or attempt to divert customers of any Crawlspace Medic outlet to a competitor, nor can you engage in any activity that could harm the goodwill of the Crawlspace Medic brand or disrupt the business of Crawlspace Medic or its franchisees.

This non-compete obligation extends to various roles, such as owner, officer, director, employee, or agent of a competing business. This means that even a passive investment in a competing business is prohibited under the terms of the Crawlspace Medic franchise agreement. The restriction is in place to protect Crawlspace Medic's market position and prevent franchisees from using their knowledge and resources gained from the franchise to benefit a competitor.

After the franchise agreement terminates, a different set of non-compete restrictions apply. For a period of 24 months following termination, you are prohibited from participating in a competing business within 25 miles of your former Crawlspace Medic outlet or any other Crawlspace Medic outlet. This post-term restriction, like the during-term restriction, includes acting as an owner, investor, officer, director, employee, or agent. Therefore, the restrictions on investment in competing businesses are more stringent during the franchise term than after termination, with the former having no geographic limitation.