What guarantee must holders of interest in the Controlled Entity provide to Ivybrook Academy?
Ivybrook_Academy Franchise · 2025 FDDAnswer from 2025 FDD Document
Therefore, during the Initial Term, neither Franchisee, its Affiliates, nor any holder of a legal or beneficial interest in Franchisee or its Affiliates (or any of their spouses or domestic partners), nor any officer, director, executive, manager or member of the professional staff of Franchisee or Franchisee's Affiliates for themselves, or through, on behalf of or in conjunction with any person, partnership, corporation, limited liability company or other business entity, shall:
7.3.1.1 divert or attempt to divert any business or customer of the Franchised Business to any Competitive Business;
7.3.1.2 do or perform any other act injurious or prejudicial to the goodwill associated with the Marks or the System; or
7.3.1.3 franchise, license, own an interest in, manage, operate, lease real estate to, or perform services for any Competitive Business wherever located.
7.3.2 Franchisee acknowledges that Franchisor would be unable to protect the Trade Secrets and other Confidential Information against unauthorized use or disclosure and would be unable to encourage a free exchange of ideas and information among Ivybrook Academy franchisees if owners of Franchised Businesses and members of their immediate families or households were permitted to solicit suppliers, business, and customers to a Competitive Business.
Therefore, during the Initial Term, neither Franchisee, its Affiliates, nor any holder of a legal or beneficial interest in Franchisee or its Affiliates (or any of their spouses or domestic partners), nor any officer, director, executive, manager or member of the professional staff of Franchisee or Franchisee's Affiliates for themselves, or through, on behalf of or in conjunction with any person, partnership, corporation, limited liability company or other business entity, shall:
7.3.2.1 solicit, divert or attempt to solicit or divert any person or party who is or was a customer of the Franchised Business at any time during the Initial Term, to any Competitive Business; or
7.3.2.2 solicit, divert, or attempt to solicit or divert, any supplier that has done business with the Franchised Business to provide supplies, products, equipment, merchandise, or services to a Competitive Business or to cease to provide supplies, products, equipment, merchandise, or services to IVYBROOK ACADEMY businesses.
Source: Item 23 — Receipts. (FDD pages 54–207)
What This Means (2025 FDD)
According to the 2025 Ivybrook Academy Franchise Disclosure Document, holders of legal or beneficial interest in the franchisee or its affiliates must adhere to certain non-compete and non-solicitation obligations during the initial term of the franchise agreement. Specifically, they are prohibited from diverting business or customers away from the franchised Ivybrook Academy business to any competitive business. They also cannot perform any actions that could harm the goodwill associated with Ivybrook Academy's marks or system. Furthermore, they are restricted from franchising, licensing, owning an interest in, managing, operating, leasing real estate to, or performing services for any competitive business, regardless of its location.
These restrictions are in place to protect Ivybrook Academy's trade secrets, confidential information, and the overall integrity of the franchise system. The franchisor believes that allowing owners of franchised businesses and their immediate families to solicit suppliers, business, and customers for a competitive business would undermine the free exchange of ideas and information among Ivybrook Academy franchisees and compromise the brand's competitive edge.
In practical terms, this means that anyone holding an interest in the Ivybrook Academy franchise, including spouses, domestic partners, officers, directors, executives, managers, and professional staff, must refrain from engaging in any activity that could be construed as competing with the Ivybrook Academy business. This includes soliciting customers or suppliers of the franchised business to support a competitive venture. These restrictions apply during the initial term of the franchise agreement, ensuring that all stakeholders are committed to the success and growth of the Ivybrook Academy brand.