For how long after the Fitstop agreement expires does the post-term covenant against competition last?
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:
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the post-term covenant against competition lasts for a continuous, uninterrupted period of 2 calendar years. This period begins immediately after the expiration, termination, assignment, or transfer of the Franchise Agreement, regardless of the reason for the end of the agreement.
This means that for two years following the end of the franchise agreement, a former Fitstop franchisee will be restricted from engaging in competitive activities. The specific restrictions are detailed elsewhere in the FDD but generally prevent the franchisee from operating a similar business or being involved with a competitor. This covenant is in place to protect Fitstop's market share, trade secrets, and overall brand integrity.
Prospective franchisees should carefully consider the implications of this post-term covenant. It could significantly limit their business options for two years after leaving the Fitstop system. It is important to fully understand the scope of the competitive restrictions and how they might impact future career or business plans. Franchisees should seek legal counsel to fully understand the implications of this clause.