Does the post-term restriction on Restricted Activities for a Ledgers franchisee still apply if the franchisee sells their Franchise Business?
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
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, the post-term restrictions on Restricted Activities do apply even if a franchisee sells their Ledgers franchise business.
Specifically, after the franchise agreement expires or terminates, the franchisee is subject to certain restrictions for a period of two years, referred to as the "Restriction Period." During this time, within the Territory or within 25 miles of its boundaries (the "Restricted Market"), the franchisee cannot own or manage any business that provides advisory, compliance, recordkeeping, payroll, or tax services, which are defined as "Restricted Activities".
This non-compete obligation remains in effect even if the franchisee sells the franchise business. Additionally, during the Restriction Period, the franchisee is prohibited from directly or indirectly providing these services to any Client, except through the Ledgers Franchise Business. This means that even after selling the business, the franchisee cannot solicit or provide services to existing clients outside of the Ledgers system within the specified geographic area for two years.