What is the geographic scope of the Engineering For Kids post-term 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 Engineering For Kids' 2025 Franchise Disclosure Document, the post-term non-compete agreement restricts a franchisee from engaging in a Competitive Business for two years after the franchise agreement's termination, expiration, or transfer. This restriction applies within the franchisee's assigned territory.
Specifically, the geographic scope includes the territory granted to the franchisee, an area extending five miles beyond the perimeter of that territory, and any other territory in which an Engineering For Kids Business operates at the time of the agreement's expiration, termination, or transfer.
This means that after leaving the Engineering For Kids system, a former franchisee cannot operate a similar business within these defined areas. Additionally, the franchisee is prohibited from contacting or diverting current or former customers or participants of the franchised business to a competitive business during this post-term period. However, these restrictions do not apply if the franchisee operates another Engineering For Kids Business under a separate, valid agreement with the company.