What is the geographic scope 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 a Competitive Business within a specific geographic area. This restriction applies for two years after the franchise relationship ends, whether through termination, expiration, or other means.
The geographic scope of this covenant is defined as a 10-mile radius around the franchisee's former location or any existing location where the Gokhale Method is taught. This means that after leaving the Gokhale Method system, a former franchisee cannot own, operate, or be involved with a business that is the same as or substantially similar to the Gokhale Method within this radius. This includes being employed by or providing assistance to a Competitive Business.
It is important to note that the two-year restriction period begins when the franchisee starts complying with the covenant. Therefore, any delay in compliance will extend the period during which the franchisee is restricted. This post-term covenant is designed to protect Gokhale Method's market and trade secrets by preventing former franchisees from using their knowledge gained during the franchise to compete against the brand shortly after their departure.