Can family members of the Expense Reduction Analysts franchisee be bound by the non-compete agreement?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) For a period of twenty-four (24) Months after the expiration and non-renewal, transfer or termination of this Agreement, regardless of the cause, neither You, Your principals, owners and Guarantors, nor any spouse or child of the age of eighteen (18) years or older of You, Your principals, owners or Guarantors, may, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation, be involved with any business competing in whole or in part with Franchisor granting franchises or licenses for Competing Businesses.
The geographic scope of this non-compete in this Section is any location where the Franchisor can demonstrate it has offered or sold licenses as of the date this Agreement is terminated or expires.
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, the non-compete agreement extends to certain family members of the franchisee. Specifically, the agreement states that for a period of 24 months after the termination, expiration, or non-renewal of the franchise agreement, the franchisee, their principals, owners, and guarantors, as well as any spouse or child of the age of eighteen (18) years or older of the franchisee, their principals, owners or guarantors, are restricted from involvement with any business competing with Expense Reduction Analysts. This restriction applies whether the involvement is direct or indirect, and whether it's for themselves or in conjunction with another entity.
This post-term covenant is geographically limited to any location where Expense Reduction Analysts can demonstrate it has offered or sold licenses as of the date the agreement is terminated or expires. This means that the restriction on family members applies only in areas where Expense Reduction Analysts has an active business presence. The purpose of this covenant is to protect Expense Reduction Analysts' business interests by preventing those with close ties to the franchisee from using inside knowledge to compete against them after the franchise agreement ends.
This provision has significant implications for prospective franchisees and their families. It means that spouses and adult children (18 years or older) are also bound by the non-compete, limiting their ability to work in a competing business for two years after the franchise ends. Franchisees should discuss this provision with their family members to ensure everyone understands the restrictions and potential impact on their future employment or business opportunities. Expense Reduction Analysts franchisees should be aware that any violation of this covenant by themselves or their covered family members could result in legal action, including injunctions, by Expense Reduction Analysts.