Can a Focalpoint Coaching franchisee perform services as a consultant for a Competitive Business?
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).
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, a franchisee is generally prohibited from performing services as a consultant for a Competitive Business during the term of the Franchise Agreement. Specifically, the franchisee, their owners, or their spouses cannot act as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business. This restriction applies regardless of where the Competitive Business is located or operates.
The FDD defines a "Competitive Business" 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.
However, there is an exception: a franchisee can own less than 2% of a Competitive Business if its stock is publicly traded on a recognized United States stock exchange, provided that neither the individual nor the franchisee controls the company. Furthermore, the franchisor may provide prior written consent, at its sole discretion, to allow a franchisee to engage in a Competitive Business. This consent would need to be obtained to perform services as a consultant for such a business.