Is there a Non-Competition agreement required for Crawlspace Medic personnel?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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:
8.3.1 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 15 — OBLIGATIONS OF THE FRANCHISEE TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 32–33)
What This Means (2024 FDD)
According to the 2024 Crawlspace Medic Franchise Disclosure Document, franchisees (referred to as "Developer" in the agreement) are subject to non-competition covenants. During the term of the Franchise Agreement, the franchisee is prohibited from diverting business or customers to competitors, participating in any similar crawlspace or basement service business, or performing any act that could harm the goodwill associated with the Crawlspace Medic brand. They also cannot interfere with the business of the franchisor or other Crawlspace Medic franchisees.
Post-termination, for a period of 24 months, the franchisee is restricted from diverting business or customers to competitors or participating as an owner, partner, director, officer, employee, or consultant in a similar crawlspace or basement service business. These restrictions are designed to protect Crawlspace Medic's confidential information, trade secrets, and the competitive advantage franchisees gain through the franchise system's training and resources.
These non-competition covenants are standard practice in franchising to protect the brand and prevent franchisees from using the franchisor's proprietary information to compete against the system, either during the franchise term or shortly after its conclusion. Prospective Crawlspace Medic franchisees should carefully review these restrictions to understand their obligations and how they might impact their future business activities should they leave the franchise system.