Must a Ledgers franchisee abide by any covenant in the Franchise Agreement that requires performance after they are no longer a franchisee?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
re Document that we furnished to you.
10.2. Modification
No modifications to this Agreement will have any effect unless such modification is in writing and signed by you and by our authorized officer. We may, however, modify the provisions of the Manual, without your consent.
10.3. Third Party Beneficiaries
Our officers, directors, members, shareholders, agents, and employees are express third party beneficiaries to this Agreement. You are not a third-party beneficiary to any agreement between us and any other franchisee.
10.4. Survival
All of the covenants that may require performance after the termination or expirations will survive any termination or expiration of this Agreement.
10.5. Severability Clause
If any covenant or provision in this Agreement is determined to be void or unenforceable, in whole or in part, it will be deemed severed and removed and will not impair the validity of any other covenant or provision of this Agreement.
10.6. Notices
Any notice, authorization, consent or other communication required or permitted under this Agreement must be made in writing and will be given by mail or courier, postage fully prepaid, or delivered personally or by facsimile, to our President, at our corporate office, presently
780 Lynnhaven Parkway, Suite 240 Virginia Beach, VA 23452 Phone 888-268-0321
Any such notice may also be given to you in the same manner at the address indicated with your signature on this Agreement or such other more current address as we may have on file for you. We may also give notice to you by e-mail.
10.7. Acknowledgements
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
10.8. Release of Prior Claims
By executing this Agreement, the Franchisee, on behalf of yourselves and your heirs, legal representatives, successors and assigns, and each assignee of this Agreement, forever releases and discharges us, our past and present employees, agents, members, officers, and directors, including any of our parent, subsidiary and affiliated entities, their respective past and present employees, agents, members, officers, and directors, from any and all Claims arising prior to the date of this Agreement. However, this release does not apply to any Claim you may have arising from representations in our Franchise Disclosure Document.
10.9. Counterparts
This Agreement may be executed by the parties in this Agreement in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute but one and the same instrument. The Agreement may be signed and delivered electronically via email, facsimile or other means, which will each have the same legal effect as if signed in hardcopy with traditional ink.
[Signature Page Follows]
Intending to be bound all the provisions expressed in this Agreement, on ("Effective Date") the authorized representatives of each Party affix his or her signature below to signify acceptance. Franchisee Entity: Ledgers Franchisee Entity Address Signator Signator Address
Schedule 1-Territory
Your Territory will be defined here.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 Ledgers Franchise Disclosure Document, a franchisee must adhere to covenants in the Franchise Agreement that require performance even after the agreement's termination or expiration. Specifically, Section 10.4 states that all covenants requiring post-termination performance will remain in effect after the agreement ends. Additionally, Section 8.5 lists post-termination obligations, including ceasing operation of the franchised business, discontinuing the use of Ledgers' marks, and adhering to non-compete and non-solicitation duties as detailed in Section 8.6.
These post-termination obligations are significant for a prospective Ledgers franchisee. They ensure the franchisee understands their responsibilities upon exiting the franchise system, whether through termination, expiration, or sale. The obligations cover various aspects, such as intellectual property (marks), client relationships (non-solicitation), and business operations (ceasing operation).
One critical aspect is the non-compete and non-solicitation agreement, which restricts a former franchisee's ability to compete with Ledgers or solicit its clients after the franchise agreement ends. The specific terms and enforceability of these clauses can vary by state, as noted in the California addendum, which indicates that such provisions may not be enforceable under California law. Therefore, a prospective franchisee should carefully review these post-termination obligations and understand their implications, especially concerning non-compete restrictions, as they can significantly impact their future business activities.
Furthermore, the franchisee is obligated to refrain from making disparaging comments about Ledgers or its employees, agents, members, directors, or franchisees. This clause aims to protect the brand's reputation even after the franchise relationship concludes. Overall, these stipulations highlight the importance of understanding all facets of the Franchise Agreement, particularly those extending beyond the active term of the franchise.