Under what conditions is a Focalpoint Coaching franchisee prohibited from developing a website mentioning the franchise?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
I further agree that, during the term of my employment/service/association or ownership participation, I will not, directly or indirectly, engage or participate in any Competitive Business (defined below in this paragraph), any of which such prohibited behavior I understand and hereby explicitly acknowledge would or could be injurious to, or (in Company's sole judgment) have an adverse effect upon, Company's protectable interests in the Confidential Information, the "FocalPoint" trademark or related Marks, or the goodwill and/or reputation of FocalPoint Franchised Businesses generally. I agree that, unless Company provides prior written consent in its sole discretion, I am prohibited from engaging in any Competitive Business as a proprietor, partner, investor, shareholder, director, officer, employee, principal, agent, advisor, or consultant. For purposes of this Agreement, a "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 or offering products similar to those offered or sold by the Business; or (ii) grants franchises or licenses to others to operate the type of business specified in the preceding subparagraph (i) (other than a FocalPoint Franchised Business operated under a franchise agreement with Company). Despite the foregoing definition of a Competitive Business, nothing under this Agreement or the Franchise Agreement will prevent Individual from owning for investment purposes 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, and so long as neither Individual nor Franchisee controls the company in question.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to the 2025 Focalpoint Coaching Franchise Disclosure Document, a franchisee is prohibited from engaging in any Competitive Business without prior written consent from Focalpoint Coaching. A "Competitive Business" is defined as any business deriving more than 20% of its revenue from selling business training or consulting services, or selling products similar to those offered by Focalpoint Coaching. This restriction extends to various roles, including proprietor, partner, investor, shareholder, director, officer, employee, principal, agent, advisor, or consultant.
This means that a Focalpoint Coaching franchisee cannot operate or be significantly involved in a competing business that offers similar services or products, as this could adversely affect Focalpoint Coaching's interests, trademark, or goodwill. The franchisee needs to obtain explicit written permission from Focalpoint Coaching to engage in any such activities. This measure ensures that franchisees remain dedicated to the Focalpoint Coaching system and do not divert resources or expertise to competing ventures.
However, there is an exception: a franchisee can own less than 2% of a publicly traded Competitive Business for investment purposes, provided that neither the franchisee nor their business controls the company. This exception allows for minor investment without raising conflict of interest concerns. The FDD excerpt does not specifically mention websites, but it can be inferred that a website promoting a Competitive Business would fall under prohibited activities unless prior written consent is obtained from Focalpoint Coaching.