Does the Dryer Vent Squad franchise agreement specify any geographic limitations on post-term non-competition?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
"Restricted Territory" refers to and means the entire geographic area within and comprising: (a) Franchisee's Operating Territory; (b) a 25 mile radius surrounding Franchisee's Operating Territory; and (c) all other operating territories for Dryer Vent Squad Businesses that are operated and/or under development by Franchisor or other Dryer Vent Squad Business franchisees as of the Effective Date of this Agreement and those that are in operation during all or any part of the Post-Term Restricted Period. However, if a court of competent jurisdiction determines that the foregoing Restricted Territory is too broad to be enforceable, then the "Restricted Territory" means the geographic area within and comprising Franchisee's Operating Territory plus a 25 mile radius surrounding Franchisee's Operating Territory.
Source: Item 23 — RECEIPTS (FDD pages 51–207)
What This Means (2024 FDD)
According to the 2024 Dryer Vent Squad Franchise Disclosure Document, the franchise agreement defines a "Restricted Territory" that includes geographic limitations on post-term non-competition. This Restricted Territory encompasses (a) the franchisee's Operating Territory, (b) a 25-mile radius surrounding the Operating Territory, and (c) all other operating territories for Dryer Vent Squad Businesses operated or under development by the franchisor or other franchisees as of the agreement's effective date and during any part of the post-term restricted period.
However, the Dryer Vent Squad agreement includes a clause that provides some flexibility. If a court deems the defined Restricted Territory too broad to be enforceable, the Restricted Territory will then be limited to the franchisee's Operating Territory plus a 25-mile radius around it. This adjustment aims to ensure the enforceability of the non-compete provisions.
For a prospective Dryer Vent Squad franchisee, this means that after the franchise agreement ends, they will be restricted from operating a similar business within their original territory and potentially a 25-mile radius around it, as well as any other areas where Dryer Vent Squad franchises are operating or planned. It is important for potential franchisees to understand the scope of these restrictions and how they might impact their future business opportunities should they decide to leave the Dryer Vent Squad system.