What constitutes a violation of the covenant not to compete for a Mr. Sandless franchisee?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
with the Franchise and for a continuous uninterrupted period commencing upon the cessation or termination
of my position with Franchisee, regardless of the cause for termination, and continuing for two (2) years thereafter, either directly or indirectly, for myself, or through, on behalf of, or in conjunction with any person, persons, partnership, or corporation, own, maintain, operate, engage in, act as a consultant for, perform services for, or have any interest in any business offering wood floor refinishing, wood free care, wood floor cleaning, and floor maintenance, outdoor wood refinishing, wood care, wood cleaning, wood maintenance, concrete cleaning and sealing, and other forms of outdoor refinishing, cleaning and maintenance, or any selling any product or products which are the same as, or substantially similar to, any of the products or services offered by a Mr. Sandless Business, except at a Mr. Sandless Business, which is or is intended to be, located within:
- 7.1 the Franchisee's Designated Territory as defined in the Franchise Agreement;
- 7.2 Fifty (50) miles of Franchisee's Designated Territory; or
- 7.3 Fifty (50) miles of any Business operating under the System and the Proprietary Marks.
The prohibitions in this Paragraph 7 do not apply to my interests in or activities performed in connection with a Franchised Business. This restriction does not apply to my ownership of less than a five percent (5%) beneficial interest in the outstanding securities of any publicly held corporation.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, a franchisee would violate the covenant not to compete if, during the term of the agreement or for two years after termination, they directly or indirectly own, maintain, operate, consult for, perform services for, or have any interest in a business offering wood floor refinishing, wood-free care, wood floor cleaning and maintenance, outdoor wood refinishing, wood care, wood cleaning, wood maintenance, concrete cleaning and sealing, or other forms of outdoor refinishing, cleaning, and maintenance. This also includes selling products that are the same or substantially similar to those offered by Mr. Sandless.
This restriction applies within the franchisee's designated territory, within 50 miles of that territory, or within 50 miles of any other Mr. Sandless business. The covenant applies regardless of the cause of termination of the franchise agreement.
However, the covenant does not apply to interests or activities related to a Mr. Sandless franchised business. It also does not apply to ownership of less than 5% of the securities of a publicly held corporation. This means a former franchisee could invest in a large, publicly traded company that happens to offer similar services, as long as their stake remains below the 5% threshold.