Who are considered 'Restricted Parties' under the Fly To Fit agreement's non-compete clauses?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
isee acknowledges that all Confidential Information is owned by Fly To Fit Franchise (except for Confidential Information which Fly To Fit Franchise licenses from another person or entity). This Section will survive the termination or expiration of this Agreement indefinitely.
13.2 Covenants Not to Compete.
- (a) Restriction In Term. During the term of this Agreement, neither Franchisee, any Owner, nor any spouse of an Owner (the "Restricted Parties") shall directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor.
- (b) Restriction Post Term. For two years after this Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer), no Restricted Party shall directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor within five miles of Franchisee's Territory or the territory of any other Fly To Fit business operating on the date of termination or transfer, as applicable. If this Agreement is terminated before the Territory is determined, then the area of noncompetition will the Development Area and the territory of any other Fly To Fit business operating on the date of termination.
- (c) Interpretation.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the non-compete clauses in the franchise agreement apply to 'Restricted Parties.' These parties include the franchisee, any owner of the franchise, and any spouse of an owner. This means that all these individuals are restricted from engaging in competitive activities during the term of the agreement.
After the agreement expires or is terminated, the restrictions continue for two years. During this post-term period, the 'Restricted Parties' are prohibited from having any ownership interest in, lending money to, providing services to, or being employed by any competitor within five miles of the franchisee's territory or the territory of any other Fly To Fit business operating on the date of termination or transfer. If the territory hasn't been determined before termination, the non-compete area will be the Development Area and the territory of any other Fly To Fit business.
Fly To Fit also requires the franchisee to ensure that their general manager and other key employees sign a confidentiality and non-compete agreement, if requested by Fly To Fit, unless prohibited by law. This extends the reach of non-compete obligations beyond just the franchisee and owners to include key personnel involved in the business's operations. A prospective franchisee should carefully consider these restrictions and ensure they understand the implications for themselves, their spouse, and key employees before entering into the agreement.