After the termination or expiration of a Focalpoint Coaching franchise agreement, are the franchisee's owners also subject to the covenant not to solicit?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the termination or expiration of this Agreement, Franchisee and Franchisee's owners agree that, for two (2) years beginning on the effective date of termination or expiration of this Agreement (or upon a transfer as provided in Subsection 12.C.(12) above), whichever is later, neither Franchisee nor any of Franchisee's owners, officers, directors or employees will, directly or indirectly (e.g., through a spouse), solicit, or attempt to solicit, any client of Franchisor or of any of Franchisor's affiliates, franchise owners or area representatives to discontinue the client relationship with Franchisor or with any of Franchisor's affiliates, franchise owners or area representatives. In addition, the use of Franchisor's client lists, employee files or other such Confidential Information for the purpose of soliciting is prohibited.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, the covenant not to solicit applies to both the franchisee and the franchisee's owners after the termination or expiration of the franchise agreement. For a period of two years following the termination or expiration date, neither the franchisee nor their owners can directly or indirectly solicit any clients of Focalpoint Coaching, its affiliates, franchise owners, or area representatives to discontinue their relationship with them. This restriction also extends to the franchisee's owners, officers, directors, or employees.
This provision prevents former franchisees and their owners from leveraging their knowledge of Focalpoint Coaching's client base to unfairly compete with the franchisor or other franchisees. The FDD specifically prohibits using Focalpoint Coaching's client lists, employee files, or other confidential information to solicit clients.
This covenant not to solicit is in place to protect Focalpoint Coaching's business relationships and goodwill. It ensures that franchisees and their owners do not exploit the franchisor's resources and reputation for their own benefit after the franchise agreement ends. The two-year restriction is designed to provide a reasonable period for Focalpoint Coaching to solidify its relationships with clients and prevent disruption caused by departing franchisees.