Is the Fitstop Franchise Agreement's covenant not to solicit customers or employees, extending beyond termination, always enforceable under California law?

According to Fitstop's 2024 Franchise Disclosure Document, the enforceability of the non-solicitation covenant extending beyond the termination of the franchise agreement is not guaranteed under California law. Specifically, the document states that such provisions "may not be enforceable under California law." This means that if a Fitstop franchisee in California were to solicit customers or employees after the franchise agreement ends, Fitstop's ability to legally prevent them from doing so might be limited.

This acknowledgment is crucial for prospective Fitstop franchisees in California because it highlights a potential limitation on Fitstop's ability to protect its customer base and workforce after a franchise terminates. Unlike in some other states, California law may not fully support the enforcement of non-solicitation agreements that extend beyond the term of the franchise. This could create a risk for Fitstop if a former franchisee decides to compete and actively solicit existing customers or employees.

For a potential Fitstop franchisee, this means understanding that the protection offered by the non-solicitation covenant might be weaker in California compared to other jurisdictions. It would be prudent to consult with a legal professional to fully understand the implications of this provision and how it might affect their business. Additionally, a prospective franchisee should inquire with Fitstop about their specific experiences enforcing these covenants in California and what strategies they employ to mitigate the risks associated with potential post-termination solicitation.