After termination of an Expense Reduction Analysts franchise, which individuals are subject to the non-compete agreement?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
27.6 Post-Term Covenant
- (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 the 2025 Expense Reduction Analysts Franchise Disclosure Document, after the termination of the franchise agreement, certain individuals are subject to a non-compete covenant for a period of 24 months. This restriction applies regardless of the reason for the termination, non-renewal, or transfer of the agreement.
The non-compete extends not only to the franchisee ("You") but also to "Your principals, owners and Guarantors." Furthermore, it includes any spouse or child of the age of eighteen (18) years or older of You, Your principals, owners or Guarantors. These individuals are prohibited from being directly or indirectly involved with any business that competes with Expense Reduction Analysts in granting franchises or licenses for Competing Businesses.
The geographic scope of this non-compete is defined as any location where Expense Reduction Analysts can demonstrate it has offered or sold licenses as of the date the franchise agreement is terminated or expires. This means the restriction could potentially apply in a broad area, depending on Expense Reduction Analysts's licensing activities.
This post-term covenant is significant for prospective franchisees as it extends beyond the franchisee themselves to include key individuals associated with the franchise and their adult family members. Franchisees should carefully consider the implications of this extended non-compete, especially if family members or business partners are involved in similar or potentially competing ventures.