Are there any exceptions to the in-term covenants for Gokhale Method franchisees?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
You covenant that during the Term of this Agreement, except as otherwise approved in writing by us, you shall not, either directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person or legal entity:
- 17.1.1.
Divert or attempt to divert any present or prospective customer of any Gokhale Method class, service or product to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System;
- 17.1.2.
Employ or seek to employ any person who is at that time employed by us, our Affiliates, or by any of our other franchisees, or otherwise directly or indirectly induce such person to leave his or her employment; or
- 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.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, there are specific in-term covenants that a franchisee must adhere to during the term of the agreement. These covenants restrict the franchisee from engaging in activities that could harm the Gokhale Method system.
Specifically, franchisees are prohibited from diverting customers to competitors, employing individuals employed by Gokhale Method or its other franchisees, and owning or participating in any competitive business. However, the document states that these prohibitions do not apply to interests or activities performed in connection with the franchisee's own Gokhale Method franchised business. This implies that a franchisee can engage in activities related to their own Gokhale Method business without violating the in-term covenants.
This exception allows franchisees to focus on growing their own Gokhale Method business without being unduly restricted, while still protecting the overall interests of the Gokhale Method system by preventing them from directly competing or undermining the brand during the term of the agreement. Any activities outside of the scope of the franchised business that might be seen as a conflict of interest would need written approval from Gokhale Method.