What section of the Dryject Franchise Agreement contains a covenant not to compete that extends beyond the termination of the franchise?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
The provisions of this Section shall survive any termination or expiration of this Agreement or any renewals thereof.
27. NON-DISCLOSURE, NON-SOLICITATION AND NON-COMPETITION AGREEMENTS
Except to the extent prohibited by the laws of the state where the Franchised Business is located or where the employee lives or works, You shall cause any person who is actively involved as a Key Employee, as defined in Section 12 of this Agreement, in the Franchised Business, at the time such person enters Your employment, to enter into a non-disclosure, non-solicitation and noncompetition agreement, in a form approved by Us or as We otherwise provide. You acknowledge and agree that any form of non-disclosure, non-solicitation and non-competition agreement is a form of agreement only and that it may or may not be enforceable in a particular jurisdiction. You agree that You are solely responsible for obtaining Your own professional advice with respect to the adequacy of the terms and provisions of any non-compete agreement You require Your employees, agents and independent contractors to sign.
You shall use Your best efforts to prevent any such persons from; (i) using, in connection with the operation of any competing business wherever located, any of the Licensed Rights; or (ii) from operating any competing business that looks like, copies or imitates any DryJect franchised business or operates in a manner tending to have such effect. If You have reason to believe that any such person has violated the provisions of the non-disclosure, non-solicitation and noncompetition agreement, You shall immediately notify Us and shall cooperate with Us to protect Us against infringement or other unlawful use of the Licensed Rights, including, but not limited to, the prosecution of any lawsuits if, in the judgment of Our counsel, such action is necessary and advisable.
The provisions of this Section shall survive any termination or expiration of this Agreement or any renewals thereof.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, Item 8 discusses non-competition agreements that extend beyond the termination of the franchise agreement. Specifically, Section 27 addresses non-disclosure, non-solicitation, and non-competition agreements for key employees, stating that the provisions of this section survive any termination or expiration of the agreement.
This means that Dryject franchisees must ensure their key employees sign agreements that prevent them from using licensed rights or operating competing businesses that imitate Dryject, even after their employment ends. The franchisee is responsible for seeking professional advice on the adequacy and enforceability of these non-compete agreements.
Furthermore, the franchisee must notify Dryject if they suspect any key employee has violated these agreements and cooperate with Dryject in protecting their licensed rights, including potential lawsuits. This obligation extends beyond the term of the franchise agreement, placing a continuing responsibility on the former franchisee to monitor and report potential violations by former employees.