For how long after the Crown Gold Exchange agreement expires or is terminated does the post-term restriction apply?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
t, neither Franchisee, any Owner, nor any spouse of an Owner (the "Restricted Parties") shall directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor.
- (b) Restriction Post Term. For two years after this Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer), no Restricted Party shall directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor within five miles of Franchisee's Territory or the territory of any other Crown Gold Exchange business operating on the date of termination or transfer, as applicable. If this Agreement is terminated before the Territory is determined, then the area of non-competition will the Development Area and the territory of any other Crown Gold Exchange business operating on the date of termination.
- (c) Interpretation. The parties agree that each of the foregoing covenants is independent of any other covenant or provision of this Agreement. If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any arbitrator or court, then the parties intend that the arbitrator or court modify such restriction to the extent reasonably necessary to protect the legitimate business interests of Crown Gold Franchising. Franchisee agrees that the existence of any claim it may have against Crown Gold Franchising shall not constitute a defense to the enforcement by Crown Gold Franchising of the covenants of this Section. If a Restricted Party fails to comply with the obligations under this Section during the restrictive period, then the restrictive period will be extended an additional day for each day of noncompliance.
- 13.3 General Manager and Key Employees. If requested by Crown Gold Franchising, Franchisee will cause its general manager and other key employees to sign Crown Gold Franchising's then-current form of confidentiality and non-compete agreement (unless prohibited by applicable law).
ARTICLE 14. DEFAULT AND TERMINATION
14.1 Termination by Franchisee. Franchisee may terminate this Agreement only if Crown Gold Franchising violates a material provision of this Agreement and fails to cure or to make substantial progress toward curing the violation within 30 days after receiving written notice from Franchisee detailing the alleged default. Termination by Franchisee is effective 10 days after Crown Gold Franchising receives written notice of termination.
14.2 Termination by Crown Gold Franchising.
- (a) Subject to 10-Day Cure Period.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, both the franchisee and the guarantor are subject to a post-term restriction. For both parties, this restriction lasts for two years after the franchise agreement expires or is terminated for any reason, or for two years after a transfer, if applicable.
During this two-year period, the franchisee and guarantor are restricted from having any ownership interest in, lending money or providing financial assistance to, providing services to, or being employed by any competitor. This restriction applies to competitors located within five miles of the franchisee's territory or the territory of any other Crown Gold Exchange business operating on the date of termination or transfer.
If the franchise agreement is terminated before the territory is determined, the area of non-competition will be the Development Area and the territory of any other Crown Gold Exchange business operating on the date of termination. Furthermore, if either the franchisee or the guarantor fails to comply with these obligations during the restrictive period, the period will be extended by an additional day for each day of noncompliance, effectively lengthening the duration of the post-term restriction.