What is the effect of a court order on the Engineering For Kids non-compete agreement?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
For two (2) years from the date of: (a) a Transfer permitted under Section 14 above; (b) expiration or termination of this Agreement (regardless of the cause for termination); or (c) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to the enforcement of this Section 17.4 (collectively, the "Post-Term Period"); you agree that you will not directly or indirectly own, manage, engage in, be employed by, advise, make loans to, consult for, or have any other interest in any Competitive Business that is, or intends to operate, inside the Territory, within an area extending five (5) miles beyond the perimeter of the Territory, and/or within any other Territory in which an Engineering For Kids Business operates at the time of expiration, termination, or transfer. You also agree that during the Post-Term Period you will not contact any current or former customers or participants of the Franchised Business, or divert or attempt to divert to a Competitive Business any current or former customers or participants of the Franchised Business. This Section 17.4 does not apply, of course, to another Engineering For Kids Business that you operate pursuant to a separate agreement with us that remains valid and in effect.
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to the 2025 Engineering For Kids Franchise Disclosure Document, a final order from a court of competent jurisdiction can affect the non-compete agreement. Specifically, the two-year post-term restriction on competition begins from the date of a final order by a court, arbitrator, or panel of arbitrators, after all appeals have been exhausted, regarding the enforcement of the non-compete agreement itself. This means that if Engineering For Kids seeks to enforce the non-compete agreement through legal action, the duration of the restriction may be determined by the outcome and timing of that legal process.
This condition is important for prospective franchisees because it clarifies when the post-term non-compete period begins if there is a dispute. Instead of simply starting from the termination or expiration date of the franchise agreement, the clock starts ticking after a final legal ruling. This could potentially delay the start of the non-compete period if legal proceedings are involved.
It is important to note that the non-compete agreement prevents the franchisee from engaging in any Competitive Business within the territory or within a five-mile radius of the territory, as well as any other territory in which an Engineering For Kids Business operates. The franchisee is also prohibited from contacting or diverting customers or participants of the Franchised Business to a Competitive Business during this period. Therefore, understanding when this period officially begins is crucial for franchisees planning their future business activities after leaving the Engineering For Kids system.