Can a Gokhale Method franchisee engage in transactions with competing businesses?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
2.2.5. The right to acquire, be acquired by, merge, affiliate with or engage in any transaction with any other businesses (whether competitive or not), with units located anywhere or business conducted anywhere. These transactions may include arrangements involving competing businesses or outlets and dual branding or brand conversions.
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.
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.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, a franchisee has the right to acquire, be acquired by, merge, affiliate with, or engage in any transaction with other businesses, even if they are competitive. This includes arrangements involving competing businesses, outlets, dual branding, or brand conversions. This allowance provides significant flexibility for a Gokhale Method franchisee to expand or diversify their business interests.
However, during the term of the franchise agreement, a Gokhale Method franchisee is restricted from owning, maintaining, operating, consulting for, performing services for, or having any interest in a Competitive Business, or offering services or products similar to those offered by a Gokhale Method Institute location. This restriction ensures that franchisees focus on developing and promoting the Gokhale Method brand and do not directly compete with the franchisor or other franchisees within the Gokhale Method system.
After the franchise relationship ends, the franchisee is subject to a post-term covenant. This covenant prevents the franchisee from engaging in a Competitive Business within a 10-mile radius of their former location or any existing Gokhale Method location for two years. A Competitive Business is defined as one that is the same as or substantially similar to the Gokhale Method franchised business or offers similar services or products. This restriction is in place to protect the Gokhale Method's market and brand integrity after a franchisee exits the system. The two-year period begins when the franchisee starts complying with the covenant if they do not immediately comply upon termination.