Can the owners of a Focalpoint Coaching franchise have other business interests?
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, franchisees and their owners are restricted from having certain business interests during the term of the franchise agreement. Specifically, they cannot have a direct or indirect controlling or non-controlling interest in a "Competitive Business." However, an exception exists for owning less than two percent (2%) of a Competitive Business if its stock is publicly traded on a recognized United States stock exchange.
A "Competitive Business" is defined as any business deriving more than twenty percent (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 businesses that grant franchises or licenses to others to operate similar businesses, excluding other Focalpoint Coaching franchises.
Furthermore, franchisees and their owners are prohibited from performing services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business. They also cannot divert or attempt to divert any business or client from the Focalpoint Coaching franchise to a Competitive Business, or engage in any activity that could harm the goodwill of the Focalpoint Coaching brand or franchise system. These restrictions apply unless Focalpoint Coaching provides prior written consent, which it may withhold at its sole discretion. Franchisees must also secure similar agreements from specified personnel, including officers, directors, managers, Associates, and other employees attending Focalpoint Coaching's training program or having access to confidential information.