What is the definition of 'Restricted Period' for a Deck Medic franchisee?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
"Restricted Period" refers to and means the 24 month period after the earliest to occur of the following: (a) the expiration of the Franchise Agreement; (b) the termination of the Franchise Agreement; (c) the date on which Franchisee assigns the Franchise Agreement to another person (other than you or your Spouse or an Immediate Family Member) provided that you do not and your Spouse does not own or hold, in the assignee, any direct or indirect ownership and/or equity interest whether legal, equitable or otherwise; (d) if you are an Owner of Franchisee, the date on which you cease to be an Owner of Franchisee; or (e) if you are the Spouse of an Owner of Franchisee, the date on which your Spouse ceases to be an Owner of Franchisee. Provided however, that if a court of competent jurisdiction determines that this period of time is too long to be enforceable, then the "Restricted Period" means the 18 month period after the earliest to occur of the following: (a) the expiration of the Franchise Agreement; (b) the termination of the Franchise Agreement; (c) the date on which Franchisee assigns the Franchise Agreement to another person (other than you or your Spouse or an Immediate Family Member) provided that you do not and your Spouse does not own or hold, in the assignee, any direct or indirect ownership and/or equity interest whether legal, equitable or otherwise; (d) if you are an Owner of Franchisee, the date on which you cease to be an Owner of Franchisee; or (e) if you are the Spouse of an Owner of Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 43–228)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, the "Restricted Period" is defined as the 24-month period following the earliest of several events: the expiration of the Franchise Agreement, the termination of the Franchise Agreement, the date the franchisee assigns the agreement to another person (excluding assignments to a spouse or immediate family member where the franchisee retains ownership), or the date an owner or their spouse ceases to be an owner of the franchise.
However, this 24-month period may be reduced to 18 months if a court deems the original duration unenforceable. In that case, the "Restricted Period" would be the 18-month period following the same triggering events: expiration, termination, assignment of the agreement, or an owner or spouse ceasing to be an owner.
This restriction has significant implications for a franchisee who leaves the Deck Medic system. It limits their ability to engage in similar businesses for a defined period, protecting Deck Medic's interests and market share. The potential reduction of the restricted period from 24 to 18 months based on court decisions introduces an element of uncertainty, but in either case, the franchisee is bound by a non-compete agreement for a significant time after leaving the franchise.