What is the dependency between Article 7 and the termination conditions for a Mr. Sandless franchise?
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, Article 7 outlines post-termination restrictions on a franchisee's activities. Specifically, it defines the scope and duration of the non-compete agreement that comes into effect upon the termination of the franchise agreement. The restrictions outlined in Article 7 are triggered by the cessation or termination of the franchisee's position, regardless of the reason for termination. This means whether the franchise agreement ends voluntarily, involuntarily, or through natural expiration, the franchisee is bound by the conditions of Article 7.
Article 7 restricts the franchisee from engaging in businesses that offer similar services or products to Mr. Sandless. This includes wood floor refinishing, cleaning, and maintenance, as well as concrete cleaning and sealing. The restrictions apply within the franchisee's designated territory, 50 miles of that territory, and 50 miles of any other Mr. Sandless business. The duration of these restrictions is two years following the termination of the franchise.
These restrictions do not apply if the franchisee is involved with another Mr. Sandless franchised business or if they hold less than a 5% beneficial interest in a publicly held corporation. This post-termination non-compete agreement is a standard practice in franchising to protect the brand and the existing franchisees from unfair competition by a former franchisee who has gained knowledge and experience from the Mr. Sandless system. A prospective franchisee should carefully consider the implications of these restrictions before entering into a franchise agreement, as they could significantly limit their business opportunities after the franchise relationship ends.