Where in the Kitchen Solvers FDD can I find information about non-compete covenants?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: Contracts]
In either case, you shall pay us (and to the appropriate governmental authority) such additional amounts as are necessary to provide us, after taking such taxes into account (including any additional taxes imposed on such additional amounts), with the same amount that we would have received or accrued had such withholding or other payment, whether by you or by us, not been required.
- D.
Non-compete Covenants.
You agree that you will receive valuable training, confidential information and goodwill that you otherwise would not receive or have access to but for the rights licensed to you under this Agreement.
You therefore agree to the following noncompetition covenants:
Unless otherwise specified, the term "you" as used in this subparagraph 10.D includes, collectively and individually, all owners, guarantors, officers, directors, members, managers, partners, as the case may be, and holders of any ownership interest in you.
We may require you to obtain from the individuals identified in the preceding sentence a signed noncompete agreement in a form satisfactory to us that contains the non-compete provisions of this subparagraph 10.D.
You covenant that during the term of this Agreement you will not, except as we otherwise agree to in writing, either directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person or entity, own, manage, operate, maintain, engage in, consult with or have any interest in any construction or remodeling business or any other business selling products and services similar to your KITCHEN SOLVERS Business other than the one authorized by this Agreement or any other agreement between us and you.
You covenant that you will not, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, or within two (2) years of the sale of the KITCHEN SOLVERS Business or any interest in you, either directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person or entity, own, manage, operate, maintain, engage in, consult with or have any interest in a Competing Business:
- a.
Inside the Territory; [Item 23: Receipts]
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.
[Item 23: Receipts]
The franchise agreement and the area development agreement contain a covenant not to compete which extends beyond the termination of the franchise. This provision may not be enforceable under California law.
[Item 23: Receipts]
Covenants not to compete upon termination or expiration of franchise agreements are generally not enforceable in the State of North Dakota, except in certain instances as provided by law.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 35–36)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, information regarding non-compete covenants can be found in Item 22, which discusses contracts, and Item 23, which covers receipts.
Specifically, Item 22 outlines the non-compete covenants that Kitchen Solvers franchisees must adhere to. During the term of the agreement, franchisees are prohibited from engaging in any construction or remodeling business, or any business selling similar products and services, unless otherwise agreed to in writing by Kitchen Solvers. This restriction applies to the franchisee, their owners, guarantors, officers, directors, members, managers, partners, and anyone holding an ownership interest in the franchise. After the agreement expires or terminates, or after the sale of the Kitchen Solvers business, the franchisee is restricted from engaging in a competing business for two years within the territory.
Item 23 also addresses non-compete covenants, stating that the franchise agreement contains a covenant not to compete that extends beyond the termination of the franchise. However, it notes that this provision may not be enforceable under California law. Furthermore, addenda to the disclosure document for specific states like North Dakota clarify the enforceability of these covenants within those jurisdictions, noting that covenants not to compete upon termination or expiration of franchise agreements are generally not enforceable in North Dakota, except in certain instances as provided by law. These clauses aim to protect Kitchen Solvers' market position and proprietary information by preventing franchisees from using their knowledge and experience gained during the franchise term to directly compete with the brand after the franchise relationship ends.