Can Kitchen Solvers bring a claim against a franchisee for failing to comply with confidentiality and noncompetition covenants?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
is Agreement in reliance upon and in consideration of the singular personal skill, qualifications and trust and confidence we repose in you or your principal officers or partners who will actively and substantially participate in the development and operation of the Businesses you are required to develop under this Agreement.
7. COVENANTS: NON COMPETITION/CONFIDENTIALITY/COMPLIANCE WITH LAWS
7.1 Non-Compete
- 7.1.1 You and each of your owners, officers and agents will not, during the Term of this Agreement, directly, indirectly or through, on behalf of, or in conjunction with any person or legal entity:
- (a) participate as an owner, director, partner, officer, franchisee, employee, consultant, advisor, salesperson, distributor, or agent or serve in any other capacity in any Competitive Business (as defined below); or
- (b) divert, or attempt to divert any present or prospective business or customer of any Business 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.
For purposes of this Agreement, the term "Competitive Business" shall mean any: (a) kitchen and/or bathroom remodeling business, cabinet refacing business and/or any other business that sells products and services similar to the products and services sold at your KITCHEN SOLVERS Business; and/or (b) business that franchises or licenses the right to open and operate a business of the type identified in (a) of this provision.
- 7.1.2 During the two (2) year period after expiration or termination of this Agreement, you and your owners, officers and agents will not directly or indirectly participate as an owner, director, partner, officer, franchisee, employee, consultant, advisor, salesperson, distributor, or agent or serve in any other capacity in any Competitive Business that is located: (a) anywhere in the Development Area; (b) within a twenty-five (25) mile radius of the Development Area; (c) within any other KITCHEN SOLVERS® franchisee's territory or within any area developer's development area; or (d) within twenty-five (25) mile radius of another franchisee's territory or another area developer's development area. During the two (2) year period after expiration or termination of this Agreement, you and your owners, officers and agents will not directly or indirectly participate as an owner, director, partner, officer, franchisee, employee, consultant, advisor, salesperson, distributor, or agent or serve in any other capacity in any franchise system that is offering or selling the right to develop, open or operate Competitive Businesses anywhere in the United States.
Source: Item 23 — Receipts (FDD pages 49–190)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, Kitchen Solvers includes non-compete and confidentiality covenants in its franchise agreement. During the term of the agreement, franchisees (including their owners, officers, and agents) are prohibited from participating in any Competitive Business, which includes kitchen and bathroom remodeling, cabinet refacing, or any business selling similar products and services. They are also restricted from diverting business or customers to competitors or taking actions that harm the goodwill associated with the Kitchen Solvers brand.
Post-termination, for a period of two years, the franchisee and their associated parties are restricted from engaging in a Competitive Business within the Development Area, a 25-mile radius of the Development Area, any other Kitchen Solvers franchisee's territory, or a 25-mile radius of another franchisee's territory.
In the event of a breach or threatened breach of any terms of the Franchise Agreement, Kitchen Solvers is entitled to seek an injunction restraining such breach and/or a decree of specific performance. This can be pursued without needing to demonstrate actual damages. Kitchen Solvers can also recover reasonable attorneys' fees and other costs incurred in obtaining equitable relief, until a final determination is made by arbitrators. However, franchisees should note that in California, the covenant not to compete extending beyond the termination of the franchise may not be enforceable.