What non-competition covenants are Gold Star franchisees subject to during the term of the franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | ||
| q. Non-competition covenants during the term of the Franchise | Section 11 | No involvement in competing business anywhere; no allowing any part of any owned or controlled premises in your Protected Territory to be used to any extent for any competing business |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 42–45)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, franchisees are subject to non-competition covenants during the term of the franchise agreement. Specifically, franchisees are prohibited from involvement in any competing business anywhere. Furthermore, franchisees cannot allow any part of any owned or controlled premises in their Protected Territory to be used for any competing business.
These restrictions are detailed in Section 11 of the franchise agreement. It is important for prospective franchisees to carefully review Section 11 to fully understand the scope and limitations of these non-competition covenants. This includes understanding what constitutes a "competing business" and the definition of the "Protected Territory."
These non-competition terms are in place to protect Gold Star's brand and market position. Such restrictions are typical in franchise agreements to prevent franchisees from using the franchisor's proprietary information and systems to benefit a competing business, either directly or indirectly, during the term of the franchise agreement.