While I am a Deck Medic franchisee, am I allowed to engage in any Prohibited Activities?
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, as a franchisee, you are restricted from engaging in "Prohibited Activities" during the term of the Franchise Agreement. These activities are defined as owning an interest (more than 3% in a publicly traded company) in a Competitive Business, operating or performing services for a Competitive Business, diverting business or customers from Deck Medic, or inducing Deck Medic's customers to another business that is not a Deck Medic Business. These restrictions are designed to prevent unfair competition and protect the Deck Medic system.
Specifically, the agreement states that engaging in Prohibited Activities would be considered unfair competition and would cause harm to Deck Medic, the System, and other Deck Medic franchisees. This highlights the importance Deck Medic places on preventing franchisees from directly competing with the brand or undermining its customer base. The restrictions also apply to the franchisee's Owners and Spouses, who must also sign an agreement acknowledging these obligations.
These restrictive covenants are typical in franchise agreements to protect the brand and the network of franchisees. Prospective Deck Medic franchisees should carefully review these restrictions to understand the full scope of activities they are prohibited from engaging in during the term of their agreement. It is important to note that these restrictions are not limited to direct competition but also extend to any actions that could potentially divert customers or harm the Deck Medic brand.