During the term of the franchise agreement, what competitive activities are prohibited for an Extreme Art Studio franchisee?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement and Multi-Franchise Addendum | Summary | |
|---|---|---|---|
| (q) | Non-competition covenants during the term of the franchise | Section 7 | No ownership interest in or performing services for a competitive business located anywhere; no interference with our or our affiliates or franchisees' relationships with any Extreme Art customers, vendors, or clients; and no engagement in any other activity injuring the goodwill of the Marks and the System, subject to applicable state law. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–46)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, during the term of the franchise, franchisees are restricted from certain competitive activities. Specifically, franchisees cannot have any ownership interest in, or perform services for, a competitive business located anywhere.
Additionally, franchisees are prohibited from interfering with Extreme Art Studio's or its affiliates' or other franchisees' relationships with customers, vendors, or clients. This prevents franchisees from poaching or disrupting established business relationships within the Extreme Art Studio system.
Finally, franchisees must not engage in any activity that could harm the goodwill associated with the Extreme Art Studio marks and the System. These non-compete obligations are subject to applicable state laws, which may place additional restrictions or limitations on their enforceability. Franchisees should consult with legal counsel to understand the specific non-compete laws in their state.