Which sections of the Eos Worldwide Franchise Agreement address non-competition covenants for Eos Worldwide franchisees?
Eos_Worldwide Franchise · 2025 FDDAnswer from 2025 FDD Document
Summary column (r) in Item 17 of the Disclosure Document and Section 16.6(a) of the Franchise Agreement prohibit you from soliciting any of your Client or the Clients of any other EOS Franchisee to a competitive business for 1 year after termination or expiration of the Franchise Agreement. Covenants not to compete such as those mentioned above are generally considered unenforceable in the State of North Dakota. The Commissioner has held that covenants restricting competition are contrary to Section 9-08-06 of the North Dakota Century Code, and are unfair, unjust, or inequitable within the intent of Section 51-19- 09 of the North Dakota Franchise Investment Law.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 31–32)
What This Means (2025 FDD)
According to the 2025 Eos Worldwide Franchise Disclosure Document, Section 16.6(a) of the Franchise Agreement and summary column (r) in Item 17 address non-competition covenants. These sections prohibit a franchisee from soliciting any of their clients or the clients of any other Eos Worldwide franchisee to a competitive business for one year after the termination or expiration of the Franchise Agreement.
For prospective franchisees, this means that after their franchise agreement ends, they cannot actively try to take clients away from Eos Worldwide or other franchisees for a period of one year. This restriction is in place to protect Eos Worldwide's business and the relationships its franchisees have built. However, in North Dakota, covenants restricting competition are generally considered unenforceable.
The definition of "competing business" is detailed in the FDD. It includes businesses that operate a non-EOS business operating system, provide training for such systems, offer similar entrepreneurial training services, or otherwise compete with Eos Worldwide. This broad definition means franchisees need to be careful about any business ventures they consider after leaving the Eos Worldwide system, to ensure they do not violate the non-compete agreement.
It is important for potential franchisees to fully understand the scope and enforceability of these non-competition clauses, especially if they plan to operate in North Dakota or have future business plans that might be considered competitive. Consulting with a legal professional to review these sections of the Franchise Agreement is advisable.