Are there any non-competition covenants for Dryject franchisees?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
Principal at least thirty (30) days prior to opening and may not change Your Operating Principal without Our prior written approval.
25. COVENANTS OF NON-SOLICITATION, NON-DISCLOSURE AND NON-COMPETITION
(a) You, and persons controlling, controlled by or under common control with You, specifically acknowledge that, pursuant to this Agreement, You will receive valuable specialized training, trade secrets, and Confidential Information, including, without limitation, information regarding the management, operations, marketing, advertising, and related information, materials, methods and techniques of Us and Our System which are beyond the present skills and experience of You and Your managers and employees, and that the value of this information arises not only from the time, effort and money that went into its compilation but also from its usage by all franchisees. You acknowledge that such specialized training, trade secrets, and Confidential Information provide a competitive advantage and will be valuable to You in the operation of the Franchised Business, and that gaining access to such specialized training, trade secrets, and Confidential Information is therefore a primary reason why You are entering into this Agreement. In consideration for such specialized training, trade secrets, Confidential Information and exclusive rights described above, You and persons controlling, controlled by or under common control with You agree and covenant that during the Term of this Agreement and for a continuous uninterrupted period commencing upon the effective date of expiration or termination of this Agreement, or for an Owner when that Owner relinquishes his/her ownership interest in You, or the date that You begin to comply with this Section, whichever is later, and for two (2) years thereafter, except to the extent prohibited by the laws of the state where the Franchised Business is located, or as otherwise approved in writing by Us, You shall not, either directly or indirectly, for You, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation or other business entity:
- (i) solicit*,* divert or attempt to solicit or attempt to divert any business or customer of the Franchised Business to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act deemed by Us to be injurious or prejudicial to the goodwill associated with Our Licensed Rights and Our System; or
- (ii) own, manage, maintain, operate, engage in, advise, consult with, invest in, be employed by or perform services as a director, officer, manager, representative, agent, or otherwise, or have any direct or indirect interest in any business that (a) specializes, in whole or in part, in offering to the public substantially similar products and/or services to those products and/or services offered by Your Franchised Business prior to the termination or expiration of this Agreement within a fifty (50) mile radius of any other franchisee's franchised business or any Franchisor-owned or affiliate-owned DryJect business (a "Competitive Business") or (b) grants franchises or licenses to others to operate a Competitive Business.
- (b) At any time, during the Term of this Agreement or thereafter, You shall not, either directly or indirectly, for You, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation or other business entity, use, in connection with the operation of any business other than the Franchised Business, any of the Licensed Rights, or any other names, marks, systems, insignias, or symbols provided or approved by Us to You pursuant to this Agreement, or cause or permit any such business to look like, copy or imitate a DryJect Franchised Business or to be operated in a manner tending to have such effect.
- (c) You expressly acknowledge that You possess skills and abilities of a general nature and have other opportunities for exploiting such skills. Consequently, You acknowledge that enforcement of the covenants made in this Section will not deprive You of Your personal goodwill or ability to earn a living.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 39–41)
What This Means (2025 FDD)
According to the 2025 Dryject FDD, there are non-competition covenants for franchisees, their trainees, and their spouses. The franchisee agrees that during the term of the agreement and for two years after the agreement's termination, they will not solicit customers of the franchised business or engage in any act injurious to the goodwill associated with Dryject's licensed rights and system. This restriction may not apply if prohibited by the laws of the state where the franchised business is located or if Dryject provides written approval.
The Dryject FDD also states that trainees (employees of the franchisee) must sign Non-Disclosure, Non-Solicitation, and Non-Competition Agreements. These agreements protect Dryject's trade secrets and system against unfair competition. Spouses of owners are also required to sign a Spousal Non-Disclosure and Non-Competition Agreement, acknowledging they may have access to Dryject's trade secrets. This agreement restricts them from engaging in or having a financial interest in businesses similar to Dryject within the United States during the franchise term and for two years after termination.
These non-competition covenants aim to protect Dryject's trade secrets, goodwill, and competitive advantage. The restrictions on franchisees, trainees, and spouses are designed to prevent the unauthorized use of confidential information and to ensure that former franchisees and related parties do not directly compete with Dryject. Franchisees should be aware of the specific terms and duration of these covenants, as well as any applicable state laws that may limit their enforceability. The FDD also indicates that if legal proceedings are necessary to enforce non-competition covenants, the restriction period begins upon the entry of an order granting preliminary injunctive relief and continues uninterrupted for the entire period of restriction.