Does the Dryer Vent Squad franchise agreement state that the non-competition restrictions are fair and reasonable?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
losure of the Confidential Information was necessary for the operations of the Franchised Business and where such director, officer, employee and/or agent previously executed and timely delivered to Franchisor the Confidentiality
Agreement in the form attached as Exhibit 3.
6.D. RESTRICTIVE COVENANTS: UNFAIR COMPETITION AND IN-TERM NON-COMPETITION OBLIGATIONS
Franchisee agrees that during the Term of this Agreement, Franchisee shall not engage in the following activities (the "Prohibited Activities"): (a) owning and/or having any legal or equitable interest whether, as an individual proprietor, owner, partner, member or shareholder of a Corporate Entity, or, in any similar capacity, in a Competitive Business other than, owning an interest of 3% or less in a publicly traded company that is a Competitive Business; (b) operating, managing, funding and/or performing services whether, as an employee, officer, director, manager, consultant, representative, agent, and/or creditor or, in any similar capacity, for or benefitting a Competitive Business; (c) diverting or attempting to divert any business or customers from Franchisor or, one of Franchisor's affiliates or franchisees; (d) inducing any customer or client of Franchisor, Franchisor's affiliates, franchisees of the System, or, of Franchisee, to any other person or business that is not a Dryer Vent Squad Business; and/or (e) engaging in any actions, inactions, and/or activities in violation of Articles 6.B. and/or 6.C. of this Agreement (all, individually and collectively, referred to as the "Prohibited Activities"). Franchisee agrees that if Franchisee were to engage in the Prohibited Activities that such actions would be unfair, would constitute unfair competition and would cause harm to Franchisor, the System and other Dryer Vent Squad Business franchisees. Franchisee agrees that the foregoing covenants and obligations shall also apply to Franchisee's Owners and that Franchisee's Owners shall each execute and deliver to Franchisor the Franchise Owner Agreement and Individual Guaranty in the form attached to this Agreement as Exhibit 1.
**6.E.
Source: Item 23 — RECEIPTS (FDD pages 51–207)
What This Means (2024 FDD)
According to the 2024 Dryer Vent Squad Franchise Disclosure Document, franchisees agree that engaging in prohibited activities during the term of the agreement would be unfair and constitute unfair competition, causing harm to Dryer Vent Squad, the System, and other Dryer Vent Squad franchisees.
Specifically, the agreement states that if a franchisee were to participate in activities such as owning, operating, or performing services for a competitive business, diverting customers, or violating confidentiality agreements, it would be considered unfair competition. This extends to the franchisee's owners, who are also required to sign agreements acknowledging these restrictions.
Dryer Vent Squad emphasizes the importance of these restrictions to protect its brand, customer relationships, and the overall integrity of the franchise system. The agreement aims to prevent franchisees from leveraging the franchisor's confidential information and established business practices to unfairly compete, either during the franchise term or afterward.
The Dryer Vent Squad franchise agreement also states that failure to comply with intellectual property, brand protection, and non-competition covenants will cause irreparable harm to Dryer Vent Squad and other franchisees, entitling Dryer Vent Squad to injunctive relief. This highlights the franchisor's commitment to enforcing these restrictions and protecting its interests and those of its franchisees.