Is Deck Medic allowed to restrict a franchisee from soliciting or hiring employees of other franchisees?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee agrees that during the Term of this Agreement, Franchisee shall not engage in the following activities (the "Prohibited Activities"): (a) owning and/or having any legal or equitable interest whether, as an individual proprietor, owner, partner, member or shareholder of a Corporate Entity, or, in any similar capacity, in a Competitive Business other than, owning an interest of 3% or less in a publicly traded company that is a Competitive Business; (b) operating, managing, funding and/or performing services whether, as an employee, officer, director, manager, consultant, representative, agent, and/or creditor or, in any similar capacity, for or benefitting a Competitive Business; (c) diverting or attempting to divert any business or customers from Franchisor or, one of Franchisor's affiliates or franchisees; (d) inducing any customer or client of Franchisor, Franchisor's affiliates, franchisees of the System, or, of Franchisee, to any other person or business that is not a Deck Medic Business; and/or (e) engaging in any actions, inactions, and/or activities in violation of Articles 6.B. and/or 6.C. of this Agreement (all, individually and collectively, referred to as the "Prohibited Activities"). Franchisee agrees that if Franchisee were to engage in the Prohibited Activities that such actions would be unfair, would constitute unfair competition and would cause harm to Franchisor, the System and other Deck Medic Business franchisees. Franchisee agrees that the foregoing covenants and obligations shall also apply to Franchisee's Owners and Spouses and that Franchisee's Owners and Spouses shall each execute and deliver to Franchisor the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1.
Source: Item 23 — RECEIPTS (FDD pages 43–228)
What This Means (2024 FDD)
Based on the 2024 Deck Medic Franchise Disclosure Document, there is no explicit clause that directly prohibits a franchisee from soliciting or hiring employees of other franchisees. However, the document does include restrictive covenants related to unfair competition. Specifically, franchisees are prohibited from diverting or attempting to divert any business or customers from Deck Medic or its affiliates or franchisees.
This could potentially be interpreted to indirectly restrict the solicitation of employees if such solicitation is seen as an attempt to divert business. The FDD also states that franchisees must maintain the confidentiality of confidential information, and this obligation extends to their directors, officers, employees, and agents who have signed a confidentiality agreement. This may limit the ability to recruit employees from other franchises if they possess confidential information.
It is important for a prospective Deck Medic franchisee to seek clarification from the franchisor regarding the specific policies on soliciting or hiring employees from other franchise locations to fully understand the scope of any potential restrictions. Additionally, franchisees should consult with an attorney to understand how the non-compete and confidentiality clauses may impact their ability to recruit employees.