What constitutes unfair competition by a Deck Medic franchisee during the franchise relationship?
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)
According to Deck Medic's 2024 Franchise Disclosure Document, several activities are considered "Prohibited Activities" and constitute unfair competition during the term of the Franchise Agreement. These restrictions are designed to protect Deck Medic's business interests and the integrity of its franchise system.
Specifically, a Deck Medic franchisee cannot own or have a legal or equitable interest in a Competitive Business, with a minor exception of owning 3% or less of a publicly traded company that is a Competitive Business. They are also prohibited from operating, managing, funding, or performing services for a Competitive Business in any capacity, whether as an employee, officer, director, or consultant. Furthermore, franchisees are barred from diverting or attempting to divert business or customers from Deck Medic, its affiliates, or other franchisees. Inducing customers of Deck Medic or its franchisees to another business that is not a Deck Medic Business is also prohibited.
These covenants also apply to the franchisee's Owners and Spouses, who are required to sign a Franchise Owner and Spouse Agreement and Guaranty. Engaging in any actions that violate the confidentiality obligations outlined in the agreement is also considered a Prohibited Activity. Deck Medic emphasizes that engaging in any of these Prohibited Activities would be deemed unfair competition and would cause harm to Deck Medic, the System, and other Deck Medic Business franchisees.