Besides the franchisee, who else is bound by the Focalpoint Coaching non-compete agreement?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee therefore agrees that, during this Agreement's term and any renewal term, and unless Franchisor provides prior written consent in its sole discretion, neither Franchisee, any of Franchisee's owners, nor any of Franchisee's or Franchisee's owners' spouses will:
- (a) have any direct or indirect controlling or non-controlling interest as an owner – whether of record, beneficially, or otherwise – in a Competitive Business, wherever located or operating (except that equity ownership of less than two percent (2%) of a Competitive Business whose stock or other forms of ownership interest are publicly traded on a recognized United States stock exchange will not be deemed to violate this subparagraph);
- (b) perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business, wherever located or operating;
- (c) divert or attempt to divert any actual or potential business or client of the Franchised Business or any FocalPoint Franchised Business to a Competitive Business; or
- (d) engage in any other activity which, in Franchisor's sole opinion, might injure the goodwill of the Marks or Franchise System.
The term "Competitive Business" means (i) any business which derives more than twenty percent (20%) of its revenue from selling business training or business consulting services and/or selling products similar to the Proprietary Products or (ii) any business granting franchises or licenses to others to operate the type of business specified in subparagraph (i) (other than a FocalPoint Franchised Business operated under a franchise agreement with Franchisor).
Franchisee agrees to obtain similar covenants from the personnel Franchisor specifies, including officers, directors, managers, Associates and other employees attending Franchisor's training program or having access to Confidential Information. Franchisor has the right to regulate the form of agreement that Franchisee uses and to be a third party beneficiary of that agreement with independent enforcement rights.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, the non-compete agreement extends beyond just the franchisee. Specifically, it also applies to any of the franchisee's owners and their spouses. This means that these individuals are restricted from engaging in activities that compete with Focalpoint Coaching during the term of the Franchise Agreement and any renewal terms, unless Focalpoint Coaching provides prior written consent.
These restrictions include having any direct or indirect ownership interest in a Competitive Business (with a minor exception for publicly traded stock), performing services for a Competitive Business, diverting business from Focalpoint Coaching, or engaging in any activity that could harm the goodwill of Focalpoint Coaching's Marks or Franchise System. A Competitive Business is defined as one that derives more than 20% of its revenue from business training or consulting services, or from granting franchises or licenses for such businesses.
Furthermore, Focalpoint Coaching requires franchisees to obtain similar non-compete covenants from personnel they specify, such as officers, directors, managers, Associates, and other employees who attend Focalpoint Coaching's training program or have access to Confidential Information. Focalpoint Coaching retains the right to regulate the form of agreement used for these personnel and to be a third-party beneficiary with independent enforcement rights. This ensures that key individuals within the franchisee's organization are also bound by non-compete obligations, protecting Focalpoint Coaching's interests and confidential information.