For how long after the Fly To Fit franchise is terminated or expires does the non-competition covenant apply?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| n. Franchisor’s right of first refusal to acquire franchisee’s business | FA: § 15.5 MUDA: none | If you want to transfer your business (other than to your co-owner or your spouse, sibling, or child), we have a right of first refusal. |
| o. Franchisor’s option to | Not Applicable | |
| purchase franchisee’s | ||
| business | ||
| p. Death or disability of franchisee | FA: §§ 2.4, 15.4 MUDA: none | If you die or become incapacitated, a new principal executive acceptable to us must be designated to operate the business, and your executor must transfer the business to an approved new owner within nine months. |
| q. Non-competition covenants during the term of the franchise | FA: § 13.2 MUDA: none | Neither you, any owner of the business, or any spouse of an owner may have ownership interest in, lend money or provide financial assistance to, provide services to, or be employed by, any competitor. |
| r. Non-competition covenants after the franchise is terminated or expires | FA: § 13.2 MUDA: none | For two years, neither you, any owner of the business, or any spouse of an owner may have ownership interest in, lend money or provide financial assistance to, provide services to, or be employed by a competitor located within five miles of your former territory or the territory of any other Fly To Fit business operating on the date of termination. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 35–39)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the non-competition covenant lasts for two years after the franchise is terminated or expires. This means that for a period of two years following the end of the franchise agreement, the franchisee, any owner of the business, or any spouse of an owner is restricted from engaging in competitive activities.
Specifically, the franchisee is prohibited from having ownership interest in, lending money or providing financial assistance to, providing services to, or being employed by a competitor. This restriction applies to competitors located within five miles of the franchisee's former territory or the territory of any other Fly To Fit business operating on the date of termination.
This non-compete clause is a standard provision in franchise agreements to protect Fly To Fit's market share and brand integrity. Prospective franchisees should carefully consider the implications of this restriction, especially if they plan to remain in the same geographic area after the franchise agreement ends. It is important to understand the scope of what constitutes a 'competitor' and how the five-mile radius is measured to fully grasp the limitations imposed by this covenant.