What is a franchisee of Dog Haus prohibited from doing during the term of the agreement regarding customers?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee and each Owner covenants that during the Term, except as otherwise approved in writing by Franchisor, Franchisee and each Owner shall not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, or legal Entity: (i) divert or attempt to divert any present or prospective Dog Haus customer to any Competitive Business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Dog Haus Marks and the Dog Haus System; or (ii) own (either beneficially or of record), engage in or render services to, whether as an investor, partner, lender, director, officer, manager, employee, consultant, representative or agent, any Competitive Business, provided, however, the restrictions stated in this Section 15.2 shall not apply to any Owner after two (2) years from the date the Owner ceases to be an officer, director, shareholder, member, manager, trustee, owner, general partner, employee or otherwise associated in any capacity with Franchisee.
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
According to the 2025 Dog Haus Franchise Disclosure Document, during the term of the agreement, a franchisee is restricted from diverting or attempting to divert any present or prospective Dog Haus customer to any Competitive Business. This includes any direct or indirect inducement or any other action that could be injurious or prejudicial to the goodwill associated with the Dog Haus Marks and the Dog Haus System.
This restriction means that a Dog Haus franchisee must not actively try to lure customers away from the Dog Haus brand to a competing business. This could include offering special deals or promotions for a competing business, or making disparaging remarks about Dog Haus to customers. The aim is to protect the brand's reputation and customer base.
This covenant applies to both the franchisee and any owner involved in the franchise. However, the restrictions on an owner cease two years after they are no longer associated with the franchisee. This non-compete clause is a standard practice in franchising to protect the franchisor's investment in its brand and system.