What is the role of the Nondisclosure and Non-Competition Agreement form in the transfer of a Focalpoint Coaching franchise?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee (and Franchisee's owners) is fully complying with this Agreement, then, subject to the other provisions of this Section 12, Franchisor will approve a transfer that meets all of the requirements in this Subsection 12.C.
If Franchisee is an entity, Franchisee's owners may transfer a non-controlling ownership interest in Franchisee or Franchisee's owners (determined as of the date on which the proposed transfer will occur) if: (1) the proposed transferee and its direct and indirect owners (if the transferee is an Entity) are of good character and otherwise meet Franchisor's then applicable standards for FocalPoint Franchised Business franchise owners (including no ownership interest in or performance of services for a Competitive Business, unless Franchisor provides prior written consent in its sole discretion); and (2) Franchisee gives Franchisor prior written notice of the transfer.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to the 2025 Focalpoint Coaching FDD, a Nondisclosure and Non-Competition Agreement is required when transferring a franchise. Specifically, if the franchisee is complying with the Franchise Agreement, Focalpoint Coaching will approve a transfer that meets the requirements outlined in Subsection 12.C. These requirements include ensuring that any proposed transferee and their owners are of good character and meet Focalpoint Coaching's standards for franchise owners. This includes not having an ownership interest in or providing services to a Competitive Business without prior written consent from Focalpoint Coaching.
The Nondisclosure and Non-Competition Agreement ensures that the transferee will not engage in any activities that could harm Focalpoint Coaching's confidential information, trademarks, or goodwill. A "Competitive Business" is defined as any business deriving more than 20% of its revenue from selling business training or consulting services, or granting franchises/licenses for similar businesses. This restriction aims to protect Focalpoint Coaching's market position and proprietary information.
However, the agreement does allow for passive investments. An individual can own less than 2% of a publicly traded Competitive Business for investment purposes, as long as neither the individual nor the franchisee controls the company. This exception provides some flexibility while still safeguarding Focalpoint Coaching's interests. The exhibit list also mentions "EXHIBIT C FORM OF NONDISCLOSURE AND NON-COMPETITION AGREEMENT", implying that a standard form is used for these agreements.