What non-competition covenants apply to an Owner of a Deck Medic franchise if the Franchise Agreement is transferred to a third party without Deck Medic's consent?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
ee, Owners, Spouses and/or their immediate family members will jeopardize the System and cause irreparable harm to Franchisor and franchisees of Deck Medic Businesses. Accordingly, Franchisee and Franchisee's Owners and Spouses agree to comply with the restrictive covenants set forth in this Agreement, including this Article 6.
6.B. RESTRICTIVE COVENANTS: KNOW-HOW
Franchisee agrees that, at all times, both during the Term of this Agreement and, after its expiration or termination, Franchisee: (a) shall not use the Know-How in any business or capacity other than the operation of the Franchised Business pursuant to this Agreement and as instructed by Franchisor; (b) shall maintain the confidentiality of the Know-How at all times; (c) shall not make unauthorized copies of documents containing any Know-How; (d) shall take all reasonable steps that Franchisor requires from time to time to prevent unauthorized use or disclosure of the Know-How; and (e) shall stop using the Know-How immediately upon the expiration, termination or Transfer of this Agreement. Franchisee agrees that the foregoing covenants shall also apply to: (a) 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; and (b) Franchisee's directors, officers, employees and agents where disclosure of the Know-How was necessary for the operations of the Franchised Business and where such director, officer, employee and/or agent previously executed and timely delivered to Franchisor the Confidentiality Agreement in the form attached as Exhibit 2.
6.C. RESTRICTIVE COVENANTS: CONFIDENTIAL INFORMATION
Franchisee agrees that, at all times, both during the Term of this Agreement and after its expiration or termination, Franchisee: (a) shall not use the Confidential Information in any business or capacity other than the Deck Medic Business operated by Franchisee; (b) shall maintain the confidentiality of the Confidential Information at all times; (c) shall not make unauthorized copies of documents containing any Confidential Information; (d) shall take such reasonable steps as Franchisor may ask of Franchisee from time to time to prevent unauthorized use or disclosure of the Confidential Information;
Source: Item 23 — RECEIPTS (FDD pages 43–228)
What This Means (2024 FDD)
Based on the 2024 Deck Medic Franchise Disclosure Document, Owners are subject to certain restrictive covenants related to Know-How and Confidential Information, both during the term of the Franchise Agreement and after its expiration, termination, or transfer. These obligations extend to the Owner, regardless of whether the transfer of the agreement is approved by Deck Medic. Specifically, Owners must cease using the Know-How and Confidential Information immediately upon the transfer of the agreement.
Owners must not use the Know-How in any business or capacity other than the operation of the franchised Deck Medic business as instructed by the franchisor. They are also obligated to maintain the confidentiality of the Know-How at all times and prevent unauthorized use or disclosure. Similarly, Owners must not use Confidential Information in any business other than the Deck Medic Business, must maintain its confidentiality, and must prevent unauthorized copies or disclosure.
These restrictions are designed to protect Deck Medic's proprietary information and business methods. The FDD states that Owners are required to sign a Franchise Owner and Spouse Agreement and Guaranty, reinforcing their commitment to these covenants. These obligations remain in place even if the Franchise Agreement is transferred, ensuring that the Know-How and Confidential Information are protected, even if the Owner is no longer directly involved in the Deck Medic franchise.