During the term of the Gokhale Method franchise, what actions are franchisees prohibited from doing regarding customers and employees?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
| m.Conditionsforfranchisorapproval | Section14.2 | We have the right to impose conditions on thetransfertothe |
|---|---|---|
| oftransfer | extentwehavetopermittransferunderstatelaw. | |
| n.Franchisor’srightoffirstrefusalto | None | |
| acquirefranchisee’sbusiness | ||
| o.Franchisor’soptiontopurchase | None | |
| franchisee’sbusiness | ||
| p.Deathorincompetenceof | Section14.2 | The franchise agreement cannot be transferred upondeathor |
| franchisee | incompetence. | |
| q.Non-competitioncovenantsduring thetermofthefranchise | Section17.1 | You cannot: divert or attempt to divert any present or prospective customer; employ or seek to employ any person employed by us, our affiliates, or any of our franchisees; be involvedinanyCompetitiveBusiness. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 27–29)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, during the term of the franchise, franchisees are restricted from certain actions related to customers and employees. Specifically, Gokhale Method franchisees are prohibited from diverting or attempting to divert any present or prospective customer of the Gokhale Method. They are also not allowed to employ or seek to employ any person who is currently employed by Gokhale Method, its affiliates, or any of its other franchisees. Finally, franchisees are prohibited from being involved in any Competitive Business.
These restrictions are common in franchising to protect the franchisor's customer base and workforce. The non-solicitation and non-competition covenants ensure that franchisees focus on growing their Gokhale Method business and do not use their access to the Gokhale Method network to benefit a competing business. These restrictions apply during the term of the franchise agreement.
It is important for prospective Gokhale Method franchisees to understand these limitations, as violating them could lead to termination of the franchise agreement and other legal consequences. Franchisees should carefully review Section 17.1 of the Franchise Agreement, as referenced in the FDD, to fully understand the scope of these restrictions and how they apply to their specific situation.