During the Post-Term Restricted Period, what activities are considered 'Prohibited Activities' for a Deer Solution franchisee?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
6.E. RESTRICTIVE COVENANTS: UNFAIR COMPETITION AND POST-TERMINATION NON-COMPETITION OBLIGATIONS
Franchisee agrees that during the Post-Term Restricted Period, Franchisee shall not engage in any Prohibited Activities provided, however, that the Prohibited Activities relating to Franchisee's having an interest in a Competitive Business will only apply with respect to a Competitive Business that is located within a Restricted Territory. If Franchisee is engaged in any Prohibited Activities during the Post-Term Restricted Period, Franchisee agrees that Franchisee's Post-Term Restricted Period will be extended by the period of time during which Franchisee was engaging in the Prohibited Activity and, any such extension of time will not be construed as a waiver of Franchisee's breach or otherwise impair any of Franchisor's rights or remedies relating to Franchisee's breach. Franchisee agrees that the foregoing covenants and restrictions 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. Franchisee agrees that the covenants and restrictions set forth in this Article 6.E. and, otherwise in this Article 6, are fair and reasonable and, that if Franchisee engaged in any Prohibited Activity that such actions would constitute acts of unfair competition, causing irreparable harm to Franchisor and the System.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, during the Post-Term Restricted Period, a franchisee is restricted from engaging in 'Prohibited Activities.' These activities include owning or having a legal or equitable interest in a Competitive Business, unless it's a minor stake of 3% or less in a publicly traded company. However, this restriction applies only to Competitive Businesses located within a Restricted Territory. The Restricted Territory includes the franchisee's Operating Territory, a 25-mile radius around it (or around the Administrative Office if there's no defined territory), and the operating territories of other Deer Solution businesses.
If a Deer Solution franchisee engages in any Prohibited Activities during the Post-Term Restricted Period, the period will be extended by the duration of the prohibited activity. This extension does not waive the franchisor's rights or remedies for the breach. These restrictions also apply to the franchisee's Owners and Spouses, who must sign a Franchise Owner and Spouse Agreement and Guaranty.
Deer Solution emphasizes that these restrictions are fair and reasonable. Engaging in Prohibited Activities would constitute unfair competition and cause irreparable harm to the franchisor and the Deer Solution system. The Post-Term Restricted Period lasts for 24 months after the franchise agreement expires, terminates, or is transferred. However, if a court finds this period too long, it will be reduced to 18 months.