Is an Eos Worldwide franchisee allowed to solicit Eos clients to a competing business?
Eos_Worldwide Franchise · 2025 FDDAnswer from 2025 FDD Document
16.6 Post-Term Competitive Activities.
In addition to those in-term covenants set forth in Section 16.5, for a period of one (1) year following the expiration or termination of the Term for any reason, unless we otherwise permit in writing, 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.
Source: Item 23 — RECEIPTS (FDD pages 74–246)
What This Means (2025 FDD)
According to Eos Worldwide's 2025 Franchise Disclosure Document, a franchisee is restricted from soliciting Eos Clients to a competitor or competing business for a period of one year after the termination or expiration of the franchise agreement. This restriction applies unless Eos Worldwide provides written permission otherwise. This means that after the franchise agreement ends, the franchisee cannot actively try to persuade Eos Worldwide clients to switch to a competing business.
Specifically, the franchisee is prohibited from soliciting, diverting, or inducing any EOS Clients to any competitor or competing business, whether through direct or indirect methods. They are also barred from inducing or soliciting Eos Worldwide's strategic partners, clients, referral sources, or brokers to affiliate with them. Additionally, franchisees cannot solicit Eos Worldwide's or its affiliates' clients, referral sources, brokers, insurers, suppliers, or any parties they do business with to terminate their engagement with Eos Worldwide or interfere with potential business relationships.
However, the agreement does allow the franchisee to continue engaging with clients for services unrelated to EOS, provided these services do not utilize Eos Worldwide's Marks, Copyrights, or other Intellectual Property, and were provided in compliance with the agreement before termination. This exception allows a former franchisee to maintain existing client relationships for non-competing services.
These restrictions are in place to protect Eos Worldwide's goodwill, client base, and business relationships. While franchisees can operate independently, these post-term competitive activity restrictions are typical in franchising to prevent unfair competition and protect the franchisor's investment in its brand and system.