During the term of the Dog Haus franchise agreement, what is a prohibited action regarding customers of Dog Haus?
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, franchisees are prohibited 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 covenant aims to protect Dog Haus's customer base and brand reputation by preventing franchisees from using their access to Dog Haus customers to benefit competing businesses. The restriction applies during the entire term of the franchise agreement. However, this restriction does not apply to any Owner after two years from the date the Owner ceases to be associated with the Franchisee.
For a prospective Dog Haus franchisee, this means that during the term of their agreement, they cannot actively solicit or encourage Dog Haus customers to patronize a competing business. Doing so could be a breach of contract and could potentially lead to termination of the franchise agreement. This non-compete clause is a standard practice in franchising to protect the brand and the network of franchisees.