Are there any exceptions to the requirement that a Gokhale Method franchisee cease operations immediately upon termination or expiration?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
EXPIRATION
Upon termination or expiration of this Agreement for any reason, all rights granted hereunder to you shall forthwith terminate, and:
- 16.1. Cease Operations. You shall immediately cease to operate the Franchised Business, and shall not thereafter, directly or indirectly, represent to the public or hold yourself out as a present or former Gokhale Method Franchised Business. Immediately upon the expiration or termination hereof, you shall dispose of, and not transfer to anyone other than us, any Gokhale Method products, equipment or other items sold hereunder
- 16.2. Cease Use of Confidential Information and Marks. You shall immediately and permanently cease to use, in any manner whatsoever, any of our Intellectual Property, including but not limited to Confidential Information, methods, procedures and techniques associated with the System, and all Marks and distinctive forms, slogans, signs, symbols, colors, and devices associated with the System. In particular, you shall cease to use, without limitation, all signs, advertising materials, displays, stationery, forms, products and any other articles that display the Marks. You shall de-identify the Location of the Franchised Business so that there is no use or display of the Marks after the effective date of termination or expiration.
- 16.3. Cancellation of Registrations. You shall take such action as may be necessary to cancel any assumed name registration or equivalent registration obtained by you which contains the "Gokhale" word, or any other Marks, and you shall furnish us with evidence satisfactory to us of compliance with this obligation within five (5) days after termination or expiration of this Agreement.
- 16.4. Assignment of Lease. You shall, at our option, except in the event you continue to operate any other business you were operating from the same Location assign to us any interest which you have in any lease or sublease for the Location. In the event we do not elect to exercise our option to acquire the lease or sublease for the Location, you shall make such modifications or alterations to the Location (including, without limitation, the changing of, and the assigning to us of, the telephone number) immediately upon termination or expiration of this Agreement as may be necessary to distinguish the appearance of the Location from that of the Franchised Business under the System, and shall make
such specific additional changes thereto as we may reasonably request for that purpose.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, upon termination or expiration of the franchise agreement, a franchisee must immediately cease operating the Franchised Business and cannot represent themselves as a current or former Gokhale Method franchisee. They must also dispose of any Gokhale Method products, equipment, or other items, and cannot transfer them to anyone except Gokhale Method.
Additionally, the franchisee must immediately and permanently stop using any of Gokhale Method's intellectual property, including confidential information, methods, procedures, techniques, marks, slogans, signs, symbols, colors, and devices associated with the system. This includes ceasing the use of all signs, advertising materials, displays, stationery, forms, products, and any other articles that display the marks. The franchisee is also required to de-identify the location of the Franchised Business to ensure there is no use or display of the marks after the termination or expiration date.
However, there is an exception regarding post-term covenants. Unless otherwise approved in writing by Gokhale Method, the franchisee is restricted from engaging in any Competitive Business within a 10-mile radius of their former location or any existing Gokhale Method location for two years following the termination or expiration of the franchise agreement. A Competitive Business is defined as one that is the same as or substantially similar to the Franchised Business, or that offers to sell any services, equipment, products, or other items similar to those offered by Gokhale Method or its franchisees. If the franchisee does not immediately comply with these restrictions, the two-year period begins when compliance starts.