What is Focalpoint Coaching's policy on the transferee or its owners having an interest in 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).
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, both franchisees and their owners face restrictions regarding interests in competitive businesses. During the franchise term, franchisees, their owners, and their spouses are prohibited from holding any direct or indirect interest in a Competitive Business, regardless of location. An exception exists for owning less than 2% of a publicly-traded Competitive Business on a recognized U.S. stock exchange.
The term "Competitive Business" is defined as any business deriving 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 businesses that grant franchises or licenses for similar business types, excluding other Focalpoint Coaching franchises.
Furthermore, franchisees must secure similar non-compete covenants from specified personnel, including officers, directors, managers, associates, and 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 and to act as a third-party beneficiary with independent enforcement rights. These measures aim to protect Focalpoint Coaching's market position and proprietary information by preventing franchisees and related parties from engaging with competing ventures during the term of the franchise agreement.