Under what conditions does the non-competition restriction in Section 15.2 of the Dog Haus franchise agreement not apply to an Owner?
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 Dog Haus's 2025 Franchise Disclosure Document, the non-competition restrictions outlined in Section 15.2 of the franchise agreement do not apply to an Owner under specific circumstances. During the term of the agreement, Owners are generally restricted from engaging in any Competitive Business.
However, this restriction ceases to apply to any Owner after a period of two years has passed from the date they are no longer associated with the Dog Haus franchisee. This includes no longer being an officer, director, shareholder, member, manager, trustee, owner, general partner, employee, or otherwise associated in any capacity with the franchisee.
This provision provides a defined exit strategy for Owners, allowing them to eventually pursue other business ventures without being indefinitely bound by the non-competition clause. It's important for prospective franchisees and their Owners to understand this timeframe and its implications for their future business plans after their involvement with the Dog Haus franchise ends.