Does the Focalpoint Coaching Nondisclosure and Non-Competition Agreement define 'Owners' of the Franchisee?
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 the 2025 Focalpoint Coaching Franchise Disclosure Document, the Nondisclosure and Non-Competition Agreement does not provide a specific definition for the term 'owners' of the franchisee. However, the document does outline certain restrictions and obligations that apply to the franchisee and the franchisee's owners.
The agreement states that during the term of the agreement, neither the franchisee, any of the franchisee's owners, nor any of the franchisee's or franchisee's owners' spouses can have a direct or indirect interest in a competitive business. This includes owning an interest, performing services for a competitive business, diverting business, or engaging in any activity that might harm the goodwill of the Focalpoint Coaching brand. The term 'Competitive Business' is defined as any business deriving more than 20% of its revenue from selling business training or consulting services, or granting franchises to others to operate such businesses.
Upon termination or expiration of the Franchise Agreement, the franchisee and the franchisee's owners are subject to a covenant not to compete for two years. This prevents them from having any direct or indirect interest in a Competitive Business within a specified area. They are also prohibited from soliciting clients of Focalpoint Coaching or its affiliates. Given the absence of a precise definition, prospective franchisees should seek clarification from Focalpoint Coaching regarding how 'owners' is defined in the context of the agreement to fully understand their obligations and restrictions.