What is the geographic scope of the non-compete restriction after the expiration or termination of the Dryer Vent Squad Franchise Agreement?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
You must also promise in writing that, among other things, during the term of the Franchise Agreement you will not participate in any business that in any way competes with a Dryer Vent Squad Business, and that for 24 months after the expiration of termination of the Franchise Agreement (with said period being tolled during any periods of non-compliance), you will not participate in any competitive business located within and/or servicing customers located within your Operating Territory and a 25 mile radius surrounding your Operating Territory. Further you will not participate in any competitive business located within and/or servicing customers located within the operating territory of any other Dryer Vent Squad Business.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 40)
What This Means (2024 FDD)
According to Dryer Vent Squad's 2024 Franchise Disclosure Document, after the franchise agreement terminates or expires, franchisees are subject to certain non-compete restrictions. Specifically, for a period of 24 months, franchisees (and their Owners) cannot be involved in any competitive business within their Operating Territory, or within a 25-mile radius surrounding their Operating Territory. This time period is paused during any periods of non-compliance.
In addition to the franchisee's territory and its surrounding area, the non-compete also extends to the operating territory of any other Dryer Vent Squad Business. This means a former franchisee cannot operate a competing business within any existing Dryer Vent Squad territory, regardless of its proximity to their former location.
The Dryer Vent Squad FDD also defines a 'Restricted Territory' as the franchisee's Operating Territory, plus a 25-mile radius around it, and all other operating territories for Dryer Vent Squad Businesses operated by the franchisor or other franchisees. However, if a court deems this too broad, the Restricted Territory will be limited to the franchisee's Operating Territory plus the 25-mile radius. This highlights the importance of understanding the full scope of these restrictions and how they might impact future business ventures after leaving the Dryer Vent Squad system.