Are former franchisees of Extreme Art Studio included in the non-disparagement clause?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5.6 NON-DISPARAGEMENT.
You agree not to (and to use your best efforts to cause your current and former shareholders, members, officers, directors, principals, agents, partners, employees, representatives, attorneys, spouses, affiliates, successors and assigns, not to) disparage or otherwise speak or write negatively, directly, or indirectly, of us, our affiliates, any of our or our affiliates' directors, officers, employees, representatives or affiliates, current and former franchisees of us or our affiliates, the Extreme Art Studio brand, the System, any Extreme Art Studio Business, any business using the Marks, any other brand or service-marked or trademarked concept of us or our affiliates, or which would subject the Extreme Art Studio brand or such other brands to ridicule, scandal, reproach, scorn, or indignity, or which would negatively impact the goodwill of us, the Extreme Art Studio brand, or such other brands.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the non-disparagement clause extends to current and former franchisees. As part of the franchise agreement, franchisees must agree not to disparage or speak negatively, either directly or indirectly, about Extreme Art Studio, its affiliates, directors, officers, employees, representatives, or current and former franchisees. This obligation also applies to the franchisee's shareholders, members, officers, directors, principals, agents, partners, employees, representatives, attorneys, spouses, affiliates, successors, and assigns.
This clause aims to protect the Extreme Art Studio brand's reputation and goodwill. The non-disparagement extends to the Extreme Art Studio brand, the System, any Extreme Art Studio Business, any business using the Marks, and any other brand or service-marked or trademarked concept of Extreme Art Studio or its affiliates. The clause prohibits any actions that would subject the Extreme Art Studio brand or other brands to ridicule, scandal, reproach, scorn, or indignity, or that would negatively impact the goodwill of Extreme Art Studio.
For a prospective franchisee, this means they must ensure that they, and those associated with them, refrain from making negative statements about the franchise, even after they are no longer a part of the Extreme Art Studio system. This is a common clause in franchise agreements, intended to maintain brand consistency and protect the franchisor from negative publicity. Franchisees should be aware of this obligation and ensure their compliance to avoid potential legal repercussions.