Is soliciting business from former Expense Reduction Analysts customers prohibited after termination?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
7.1Post-Term Restrictive Covenant for Consulting Employee of Franchised Business or Manager, Officers, Directors of the Franchisee. In the event I am a manager of the Franchised Business, or an officer, director, manager or partner of the Franchisee that has not already executed a Personal Guaranty agreeing to be bound by the terms of the Franchise Agreement, then I further agree that I will not be involved in a Competing Business of any kind for a period of two (2) years after the expiration or termination of my employment with the Franchisee for any reason: (i) at the Premises; (ii) within the Area; or (iii) within a 50-mile radius of (a) the perimeter of the Area, or (b) any other Area granted by the Franchisor to any other Franchised Business at the time my employment with the Franchisee ceases through the date of my involvement with the Competing Business. I also agree that I will not be involved in the franchising or licensing of any Competing Business at any location, or undertake any action to divert business from the Franchised Business to any Competing Business or solicit any of the former customers or employees of the Franchisee for any competitive business purpose, during this two (2) year period following the termination or expiration of my employment or independent contractor relationship with the Franchisee. All parties acknowledge and agree that there is no intent to prohibit me from obtaining employment or engagement with another franchisee of Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to the 2025 Expense Reduction Analysts FDD, a post-term restrictive covenant applies to consulting employees or managers, officers, and directors of the franchisee. Specifically, if an individual is a manager of the franchised business, or an officer, director, manager, or partner of the franchisee who has not already executed a personal guaranty agreeing to be bound by the terms of the Franchise Agreement, they are subject to certain restrictions.
These individuals agree not to be involved in a competing business for two years after their employment or relationship with the franchisee ends. This restriction applies (i) at the premises, (ii) within the area, or (iii) within a 50-mile radius of the area's perimeter or any other area granted by Expense Reduction Analysts to another franchised business.
Furthermore, these individuals are prohibited from involvement in franchising or licensing any competing business at any location. They also cannot take actions to divert business from the franchised business to any competing business or solicit former customers or employees of the franchisee for any competitive business purpose during the two-year period following the termination or expiration of their employment or independent contractor relationship with the Expense Reduction Analysts franchisee. However, the agreement clarifies that there is no intent to prohibit employment or engagement with another franchisee of Expense Reduction Analysts.