factual

Under the Gokhale Method Franchise Agreement, what sections survive termination?

Gokhale_Method Franchise · 2024 FDD

Answer from 2024 FDD Document

  • 16.11. Compliance With Covenants. You shall comply with the covenants contained in Section 17 of this Agreement.

17. COVENANTS

  • 17.1. In-Term Covenants. You specifically acknowledge that, pursuant to this Agreement, you will receive valuable, specialized training and Confidential Information, including, without limitation, information regarding the Gokhale Method and techniques used by us and the System.

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.

  • 17.2.

Post-Term Covenants.

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.

  • 17.3.

Compliance With Anti-Terrorism Laws.

You acknowledge that under applicable U.S. law, including, without limitation, Executive Order 13224, signed on September 23, 2001 (the "Executive Order"), we are prohibited from engaging in any transaction with any person engaged in, or with a person aiding any person engaged in, acts of terrorism, as defined in the Executive Order.

Source: Item 22 — CONTRACTS (FDD page 34)

What This Means (2024 FDD)

The Gokhale Method's 2024 Franchise Disclosure Document outlines several obligations that a franchisee must adhere to upon termination or expiration of the franchise agreement. These obligations ensure the protection of Gokhale Method's intellectual property, brand reputation, and competitive interests.

Upon termination, a franchisee must immediately cease operating the Gokhale Method franchised business and cannot represent themselves as a current or former franchisee. They must also stop using any of Gokhale Method's intellectual property, including confidential information, methods, trademarks, and distinctive elements associated with the system. This includes removing all signs, advertising materials, and other items displaying Gokhale Method's marks from the business location. The franchisee is also obligated to cancel any assumed name registrations containing the "Gokhale" word or any other marks.

Furthermore, the franchisee must comply with the covenants outlined in Section 17 of the agreement, which includes in-term and post-term covenants. These covenants restrict the franchisee from engaging in competitive activities during the term of the agreement and for a specified period after termination within a certain radius of their former location or any existing Gokhale Method location. These measures are designed to prevent franchisees from leveraging the knowledge and training gained during the franchise term to directly compete with Gokhale Method. The franchisor also has the option to purchase equipment, signs, inventory, materials, supplies, and fixtures related to the operation of the franchised business.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.