What geographic limitations apply to the non-competition agreement for a Deer Solution franchisee after the franchise relationship?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
However, you may rebut this presumption by providing evidence conclusively demonstrating that you did not disclose the Know-How nor permit disclosure of the Know-How to the family member.
- (f) Reasonableness of Covenants and Restrictions. You acknowledge and agree that: (i) the terms of this Agreement are reasonable both in time and in scope of geographic area; and (ii) you have sufficient resources and business experience and opportunities to earn an adequate living while complying with the terms of this Agreement. YOU WAIVE ANY RIGHT TO CHALLENGE THE TERMS OF THIS AGREEMENT AS BEING OVERLY BROAD, UNREASONABLE OR OTHERWISE UNENFORCEABLE. Although you and we both believe that the covenants in this Agreement are reasonable in terms of scope, duration and geographic are, we may at any time unilaterally modify the terms of this Article 4 (Intellectual Property, Brand Protection and Non-Competition Covenants and Restrictions) by limiting the scope of the Prohibited Activities, narrowing the definition of a Competitive Business, shortening the duration of the Restricted Period, reducing the geographic scope of the Restricted Territory and/or reducing the scope of any other covenant imposed upon you under this Article 4 to ensure that the terms are enforceable under applicable law.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
The 2025 Deer Solution Franchise Disclosure Document (FDD) does not specify the geographic limitations of the post-termination non-competition agreement. However, the FDD does state that during the term of the agreement, the franchisee is granted a nonexclusive license to operate a Deer Solution business within their designated operating territory, as outlined in Schedule 1 of the agreement. This operating territory consists of a specific territory, and may include additional territories if agreed upon by both Deer Solution and the franchisee. The franchisee's administrative office must be located within this operating territory, and they are only authorized to offer and sell approved services and products within this defined area.
Item 4(f) of the FDD states that the franchisee acknowledges and agrees that the terms of the agreement are reasonable in both time and geographic scope. The franchisee also waives any right to challenge the terms of the agreement as overly broad, unreasonable, or otherwise unenforceable. However, Deer Solution retains the right to unilaterally modify the terms of Article 4, which includes non-competition covenants, to ensure enforceability under applicable law. This modification could involve limiting the scope of prohibited activities, narrowing the definition of a competitive business, shortening the duration of the restricted period, or reducing the geographic scope of the restricted territory.
Since the FDD does not provide specific details on the geographic scope of the post-termination non-compete, it is important for a prospective franchisee to seek clarification from Deer Solution regarding these restrictions. Understanding the exact geographic limitations is crucial for assessing the potential impact on future business opportunities after the franchise agreement ends. A prospective franchisee should inquire about the specific geographic area covered by the non-compete and how it relates to their operating territory.