What is the duration of the post-term covenant for Gokhale Method franchisees?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
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, maintain, operate, engage in, be employed by, provide assistance to, or have any interest in (as owner or otherwise) any Competitive Business.
A "Competitive Business" is a business that: is the same as, or substantially similar to, the Franchised Business; or that offers to sell or sells any services, equipment, products or other items which are the same as, or substantially similar to, any of the services, equipment, products or other items offered by us or our franchisees or Affiliates.
If you do not immediately comply with this paragraph upon the end of our relationship, the two-year period referred to above will commence when you begin compliance.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, the post-term covenant restricts a franchisee from engaging in competitive business activities within a 10-mile radius of their former location or any existing Gokhale Method teaching location. This restriction lasts for two years following the termination or expiration of the franchise agreement.
The covenant prevents the franchisee from owning, operating, or being involved in any business that is the same as or substantially similar to the Gokhale Method business. This includes offering similar services, equipment, products, or other items. The agreement specifies that if a franchisee does not immediately comply with the post-term covenant, the two-year period begins when they do begin to comply.
This non-compete clause is a standard practice in franchising to protect the brand and its franchisees from unfair competition by former franchisees who have gained knowledge and experience through the Gokhale Method system. Prospective franchisees should carefully consider the implications of this restriction, especially if they plan to remain in the same geographic area after the franchise agreement ends.