Does the Gokhale Method agreement allow the franchisee to have an interest in a Competitive Business if it is in connection with their Franchised Business?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
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- 17.1.3. Own, maintain, operate, engage in, act as a consultant for, perform services for, or have any interest in any Competitive Business or offer to sell or sell any services, equipment, product or other item which is the same as, or substantially similar to, any of the services, equipment, products or other items offered by a Gokhale Method Institute location. The prohibitions in this Section 17 shall not apply to interests in or activities performed in connection with your Franchised Business.
- 17.2. Post-Term Covenants. You covenant that, except as otherwise approved in writing by us, you shall not, within a 10-mile radius of your former Location or of any location then existing where the Gokhale Method is taught, and for a continuous, uninterrupted period of two (2) years following the end of our relationship with you, whether by termination, expiration or otherwise, either directly or indirectly own, main
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, franchisees are generally prohibited from owning, operating, or having an interest in any Competitive Business, which is defined as a business that is the same as or substantially similar to the Gokhale Method franchised business. This includes offering or selling similar services, equipment, products, or other items.
However, the agreement includes an exception to this restriction. The prohibitions outlined in Section 17 of the franchise agreement do not apply to interests or activities performed in connection with the franchisee's Gokhale Method Franchised Business. This means a franchisee can have an interest in a Competitive Business if that interest or activity is directly related to and supports their operation of the Gokhale Method franchise.
This allowance provides some flexibility for Gokhale Method franchisees to engage in related business activities that could complement their franchise, but it's important to ensure any such activities are clearly connected to the franchised business to avoid violating the non-compete clause. Franchisees should seek clarification from Gokhale Method regarding what specific activities would be considered "in connection with" the Franchised Business to ensure compliance.