Is a Focalpoint Coaching franchisee allowed to divert potential clients from another Focalpoint Coaching franchise to a Competitive Business?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
ithout Franchisor's prior approval.
7. EXCLUSIVE RELATIONSHIP.
Franchisee acknowledges that Franchisor has granted Franchisee the Franchise in consideration of and reliance upon Franchisee's agreement to deal exclusively with Franchisor.
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;
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to the 2025 Focalpoint Coaching Franchise Disclosure Document, a franchisee is prohibited from diverting or attempting to divert any actual or potential business or client of their FocalPoint Franchised Business, or any other FocalPoint franchise, to a Competitive Business. This restriction is in place during the term of the Franchise Agreement and any renewal term. The only way a franchisee can engage in such activity is if FocalPoint Coaching provides prior written consent, which is at the franchisor's sole discretion.
A "Competitive Business" is defined as any business that derives more than 20% of its revenue from selling business training or consulting services, or from selling products similar to FocalPoint Coaching's proprietary products. It also includes any business that grants franchises or licenses to others to operate a similar type of business, excluding other FocalPoint Coaching franchises operating under a franchise agreement with the franchisor.
This clause ensures that FocalPoint Coaching franchisees focus on growing their own business within the FocalPoint system and do not use their position to benefit competing businesses. It also protects the FocalPoint Coaching brand and franchise system from potential harm that could arise if franchisees were allowed to divert clients to competitors. Franchisees must also ensure that their personnel, including officers, directors, managers, associates, and other employees who attend FocalPoint Coaching's training program or have access to confidential information, agree to similar covenants.