Can a Devon Creek franchisee divert customers to a competitor after the franchise is terminated?

According to Devon Creek's 2024 Franchise Disclosure Document, a franchisee is restricted from diverting customers to a competitor both during and after the franchise term. Specifically, for 24 months after the termination of the Franchise Agreement, a franchisee may not divert or attempt to divert customers or referral sources of any Devon Creek outlet to any competitor. This restriction applies to any competing business within 25 miles of the former Devon Creek Territory or any other Devon Creek office location. This is subject to state law.

This non-compete clause prevents a former Devon Creek franchisee from leveraging the knowledge and relationships gained during their franchise term to unfairly compete with Devon Creek. The clause aims to protect the goodwill of the Devon Creek brand and the business interests of existing franchisees. The 24-month and 25-mile restrictions are fairly standard in the franchise industry, as these terms are designed to provide reasonable protection without unduly restricting the former franchisee's ability to earn a living.

It is important to note that these non-competition covenants are subject to state law, which means the enforceability and specific terms may vary depending on the state in which the franchise operates. Prospective franchisees should carefully review these restrictions and understand how they apply in their specific location. It is also important to note that the franchisee cannot do any act that could damage the goodwill of the Marks or System, or disrupt or jeopardize Devon Creek's business or that of its franchisees.