Does the Kitchen Solvers non-compete agreement replace the franchisee's obligation to protect trade secrets and confidential information?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 23 — Receipts (FDD pages 49–190)
What This Means (2025 FDD)
Based on the 2025 Kitchen Solvers Franchise Disclosure Document, the franchise agreement includes covenants related to non-competition and confidentiality. During the term of the agreement, franchisees and 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 barred from diverting business or customers to competitors or performing any act that could harm the goodwill associated with the Kitchen Solvers brand.
Post-termination, for a period of two years, the non-compete extends to prevent involvement in a Competitive Business within the Development Area, a 25-mile radius around it, any other Kitchen Solvers franchisee's territory, or within a 25-mile radius of another franchisee's territory. This suggests that the non-compete agreement is designed to protect Kitchen Solvers' market share and brand reputation by preventing former franchisees from directly competing in similar businesses within specific geographic areas.
The FDD excerpt does not explicitly state whether the non-compete agreement replaces the franchisee's obligation to protect trade secrets and confidential information. It is important for a prospective franchisee to clarify with Kitchen Solvers whether the non-compete agreement encompasses all aspects of protecting trade secrets and confidential information or if there are separate obligations and agreements related to these protections. Understanding the full scope of these obligations is crucial for ensuring compliance and avoiding potential legal issues.
To gain a comprehensive understanding, a prospective Kitchen Solvers franchisee should seek clarification from the franchisor regarding the specific measures required to protect trade secrets and confidential information, and how these measures interact with the non-compete agreement. This will help in assessing the full extent of the franchisee's responsibilities and potential liabilities.