What is the definition of 'Restricted Period' in the context of the Ledgers disparagement clause?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
e adjusted book value, which is the undepreciated book value of the assets on your most recently filed federal tax return prior to the date of the termination or expiration;
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- Abide by any other covenant in this Agreement that requires performance by you after you are no longer a franchisee.
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- Refrain from making disparaging comments in any form about us or our current and former employees, agents, members, directors, or franchisees.
8.6. Non-Compete and No Solicitation
A. Post-Term.
You will not, during the Term and for a period of two (2) years after expiration or termination of this Agreement ("Restriction Period"), in the Territory or within twenty-five (25) miles of the boundaries of the Territory ("Restricted Market"), own or manage any business that provides prospective clients advisory, compliance, recordkeeping, payroll, or tax services ("Restricted Activities").
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, the 'Restricted Period' in the context of the disparagement clause is defined as the period during the Term of the Franchise Agreement and for two years after the expiration or termination of the agreement. During this time, franchisees must avoid intentional conduct that could harm the Franchise Business's relationships with existing clients or vendors.
This means that for the entire length of the franchise agreement, plus an additional two years after it ends (whether through expiration or termination), a Ledgers franchisee is prohibited from intentionally acting in a way that damages the business's relationships with its clients or vendors. This restriction remains in place even if the franchisee sells their Franchise Business.
This clause is designed to protect Ledgers's business interests and goodwill by preventing franchisees from bad-mouthing the franchise or taking actions that could undermine its relationships with clients and vendors, both during the term of the agreement and for a reasonable period afterward. This type of clause is common in franchise agreements to ensure brand protection and maintain stable business relationships.