Under what condition can a Crawlspace Medic franchisee engage in activities otherwise prohibited by the non-competition covenants?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
In consideration for such specialized training, trade secrets, Confidential Information and rights, Franchisee and each Principal, if any, covenant that, except as otherwise approved in writing by Franchisor:
- 19.5.1.
During the term of this Agreement, Franchisee and each Principal, if any, shall not, either directly or indirectly, for themselves 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 Franchised Business or of other 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) seek to employ any person who is at that time employed by Franchisor or otherwise induce such person to leave his or her employment; or (iv) do or
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, a franchisee can engage in activities otherwise prohibited by the non-competition covenants if they receive written approval from Crawlspace Medic. This waiver from the non-compete restrictions must be explicitly approved in writing by the franchisor.
This condition protects Crawlspace Medic's interests by ensuring that any deviation from the non-competition agreement is controlled and approved by them. It allows for flexibility in specific situations where the franchisor might deem it acceptable for a franchisee to engage in activities that would otherwise be restricted. Without this written approval, franchisees are strictly bound by the non-competition covenants outlined in their agreement.
For a prospective Crawlspace Medic franchisee, this means that if they wish to participate in any business activities that might be seen as competitive, they must seek and obtain explicit written consent from Crawlspace Medic. Relying on verbal agreements or assumptions could lead to a breach of contract and potential legal repercussions. It is essential to maintain clear and documented communication with the franchisor regarding any potential conflicts of interest or business opportunities that might fall under the scope of the non-competition agreement.