Does the Eos Worldwide franchise agreement prohibit franchisees from interfering with potential business relationships of Eos Worldwide or its affiliates?
Eos_Worldwide Franchise · 2025 FDDAnswer from 2025 FDD Document
you may not, directly or indirectly (in any capacity, on your own account or as an owner, partner, associate, agent, consultant, licensor, licensee, advisor, employee, independent contractor, member, stockholder (except for the passive ownership of five percent (5%) or less of the equity of a publicly traded company), officer or otherwise of another), and whether alone or in conjunction with any other person or entity, do any of the following:
- (a) Solicit, divert, or induce, any EOS Clients to any competitor or competing business, by direct or indirect inducement or otherwise;
- (b) Induce or attempt to induce, or solicit any of our or other EOS franchisee's strategic partners, Clients, referral sources or brokers, to accept any affiliation with you;
- (c) Solicit, divert, or induce, directly or indirectly, any of our or our affiliates' clients, referral sources, brokers, insurers, suppliers, or any other parties with whom we (or our affiliates) do business or whom you know we (or any of our affiliates) have contacted or solicited for business relationships, to terminate any such engagement with us or our affiliates, or otherwise attempt to interfere with any such business relationships or potential business relationships, as the case may be; or
- (d) Perform or contribute to any other act injurious or prejudicial to the goodwill associated with us or our affiliates or the Marks, our trade names or other Intellectual Property;
provided, that, you may continue to engage with Clients for other services not related to EOS and that do not make use of our Marks, Copyrights, or other Intellectual Property or information, and for whom you provided such other services in compliance with this Agreement prior to termination.
16.7 Non-Disparagement.
Source: Item 23 — RECEIPTS (FDD pages 74–246)
What This Means (2025 FDD)
According to Eos Worldwide's 2025 Franchise Disclosure Document, the franchise agreement explicitly prohibits franchisees from interfering with the business relationships of Eos Worldwide and its affiliates. Specifically, franchisees are not allowed to solicit or induce clients, referral sources, brokers, insurers, suppliers, or any other parties with whom Eos Worldwide or its affiliates conduct business to terminate their engagement with the company.
This restriction is in place to protect Eos Worldwide's existing business relationships and prevent franchisees from disrupting those relationships for their own gain. This clause ensures that franchisees cannot undermine the franchisor's established network of partners and clients. Such a provision is common in franchise agreements to safeguard the franchisor's business interests and maintain stability within the franchise system.
The agreement defines "competing business" as any business that operates a non-EOS system, provides training for such systems, or offers similar entrepreneurial services, further clarifying the scope of prohibited activities. This definition ensures that franchisees understand what constitutes a competitive activity and helps prevent conflicts of interest. Franchisees are permitted to engage with clients for services unrelated to EOS, provided they do not use Eos Worldwide's intellectual property and were providing such services before the termination of the agreement, offering a limited exception to the broad restriction.
In practical terms, this means an Eos Worldwide franchisee must be very careful not to take any action that could harm Eos Worldwide's relationships with its clients, suppliers, or other business partners. Violation of this provision could lead to breach of contract and potential termination of the franchise agreement.