During the term of the Floors To Go agreement, is there a covenant not to compete?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
- c.
Canvass or solicit any business from any present, former or prospective customer of ours, any of our affiliates, or any of our members, or advise any such customer to curtail or cancel their business with us, any of our affiliates, or any of our members;
- d.
Divert or attempt to divert any business of the Floors To Go Showroom licensed under this Agreement to any competitor by direct or indirect inducements or otherwise, or to do or perform directly or indirectly, any other act injurious or prejudicial to the goodwill associated with our Marks and the franchise system; or
e. Disclose to any person, firm or corporation the name of, or business arrangement with, any of our present, former, future or prospective suppliers or customers, or any of those of our subsidiaries, our affiliates or any of our members.
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, during the term of the agreement, franchisees are restricted from certain competitive actions. Specifically, franchisees cannot solicit business from Floors To Go's customers, divert business away from the licensed Floors To Go Showroom, or disclose supplier or customer information. These restrictions aim to protect Floors To Go's customer relationships, business, and confidential information during the agreement.
Floors To Go franchisees are prohibited from actions that could harm the goodwill associated with Floors To Go's marks and franchise system. This includes refraining from diverting business to competitors through direct or indirect means. Additionally, franchisees must not disclose any business arrangements with Floors To Go's suppliers or customers to any third party.
These in-term restrictions are typical in franchise agreements to protect the franchisor's brand, customer base, and trade secrets. Prospective Floors To Go franchisees should carefully review these restrictions to understand the scope of prohibited activities and ensure they can comply with these obligations during the franchise term. Understanding these obligations is crucial for maintaining a successful and compliant franchise operation with Floors To Go.