What is the duration of the post-term covenant against competition for a Fitstop franchisee?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.3 Post-Term Covenant(s) Against Competition and Other Restrictive Covenants. In consideration of the aforementioned valuable consideration, for a continuous, uninterrupted period for 2 calendar years after the Term, commencing upon expiration, termination, assignment, or transfer of this Agreement, regardless of the cause, you agree to the following:
18.3.1 Without our prior written consent, you shall not disclose the Competitive Information to any person nor shall you reprint or reproduce the Competitive Information in whole or in part;
18.3.2 Without our prior written consent, you shall not employ or seek to employ any person who is at the time employed by us, any of our subsidiaries, or any person who is at the time operating a Franchise or otherwise induce, directly or indirectly, such person to leave such employment.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees are subject to a post-term covenant against competition for a period of 2 calendar years. This restriction begins immediately after the expiration, termination, assignment, or transfer of the Franchise Agreement, regardless of the reason for the termination.
During this two-year period, the franchisee is restricted from disclosing Competitive Information to any person without Fitstop's prior written consent, as well as from reprinting or reproducing the Competitive Information. Additionally, the franchisee cannot employ or seek to employ anyone who is currently employed by Fitstop, its subsidiaries, or another Fitstop franchisee, nor can they induce such individuals to leave their employment.
These post-term covenants are designed to protect Fitstop's competitive advantage and confidential information. Franchisees should carefully consider the implications of these restrictions, as they could limit their ability to work in the fitness industry for two years after leaving the Fitstop system. It is important to note that these restrictions are in place regardless of the reason for the termination of the franchise agreement.