When does the period of restriction begin running if legal proceedings are brought against a Dryject franchisee to enforce a non-competition covenant?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
Should legal proceedings have to be brought by Franchisor against Trainee to enforce any Non-Competition Covenant or for Trainee's failure to maintain Confidentiality, the period of restriction shall be deemed to begin running on the date of entry of an order granting Franchisor preliminary injunctive relief and shall continue uninterrupted for the entire period of restriction.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to the 2025 Dryject Franchise Disclosure Document, if Dryject brings legal proceedings against a franchisee to enforce a non-competition covenant, the period of restriction begins on the date a court order is issued granting Dryject preliminary injunctive relief. This means that the non-compete clock doesn't start ticking simply when a lawsuit is filed, but only if a judge agrees there's enough evidence of a violation to warrant immediate action.
This is a significant point for prospective franchisees. It clarifies that the non-compete period isn't triggered by unsubstantiated claims. Dryject must convince a court to grant preliminary injunctive relief, demonstrating a likelihood of success on the merits of their non-compete claim. This provides some protection to the franchisee against frivolous lawsuits designed to stifle competition.
The restriction period then continues uninterrupted for its entire duration once the preliminary injunction is in place. This underscores the importance of understanding the scope and enforceability of the non-competition covenant before signing the franchise agreement. Franchisees should consult with an attorney to assess the specific terms and potential implications of the non-compete in their state, as enforceability can vary by jurisdiction.