Does the Fitstop franchise agreement prohibit a franchisee from employing someone employed by Fitstop or another franchisee without prior written consent?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
ated solely to the operation of the Franchise, nor shall you reprint or reproduce the Competitive Information in whole or in part for any purpose except in connection with instruction of employees in the operation of the Franchise.
- 18.2.2 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 by any person who is at the time operating a Franchise or otherwise induce, directly or indirectly, such person to leave such employment. This paragraph shall not be violated if such person has left the employment of any of the foregoing parties for a period in excess of 180 calendar days.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the franchise agreement addresses the employment of individuals currently employed by Fitstop, its subsidiaries, or other franchisees. During the term of the agreement, a franchisee is restricted from employing or attempting to employ anyone currently working for Fitstop, its subsidiaries, or another franchisee without obtaining prior written consent from Fitstop. This restriction also includes indirectly inducing such individuals to leave their current employment.
However, this restriction does not apply if the individual has already left their previous employment with Fitstop, its subsidiaries, or another franchisee for a period exceeding 180 calendar days. This provision aims to protect Fitstop and its franchisees from the poaching of employees and the potential disruption of their operations.
This type of clause is common in franchise agreements to protect the franchisor and franchisees from losing valuable employees to each other. It ensures a level playing field and prevents franchisees from actively recruiting staff from within the Fitstop system. Franchisees need to be aware of this restriction and ensure they obtain written consent from Fitstop before hiring anyone currently employed within the Fitstop network, unless the 180-day waiting period has been met.
The franchise agreement also includes similar restrictions post-term. For a period of two years after the termination, expiration, assignment, or transfer of the agreement, a franchisee is prohibited from employing or seeking to employ anyone who is currently employed by Fitstop, its subsidiaries, or another franchisee, without prior written consent. This post-term covenant is designed to further protect Fitstop's interests and prevent former franchisees from leveraging their knowledge and resources to unfairly compete with the franchise system.