Is a Mr. Sandless franchisee allowed to be employed by a competitive business during the term of the agreement?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of this Agreement, neither you, your principals, nor any member of the immediate family of you or your principals may, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation:
18.1.1 Own, maintain, engage in, be employed by, lend money to, extend credit to or have any interest in any other business offering wood floor refinishing, including sanding, dustless refinishing, screening and recoats, sandless refinishing, wood polishing, wood floor care, wood floor cleaning, floor maintenance, floor care, floor refinishing, and floor cleaning for tile, VCT, terrazzo, marmoleum, linoleum, vinyl, asphalt, rubber, laminates, concrete, slate, brick, stone, granite, grout sealing and coloring, ceramic floors, and cabinet refinishing, and exterior wood refinishing or any other services and/or products similar to those offered under the System (a "Competitive Business"); provided, however, that this Section does not apply to your operation of any other Mr. Sandless Business pursuant to a valid franchise agreement with us or your ownership of less than five percent (5%) of any publicly held company;
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, franchisees are restricted from engaging with competitive businesses during the term of their agreement. Specifically, neither the franchisee, their principals, nor any immediate family member of the franchisee or their principals can directly or indirectly own, maintain, engage in, be employed by, lend money to, extend credit to, or have any interest in a Competitive Business. A Competitive Business is defined as any business offering wood floor refinishing, including sanding, dustless refinishing, screening and recoats, sandless refinishing, wood polishing, wood floor care, wood floor cleaning, floor maintenance, floor care, floor refinishing, and floor cleaning for tile, VCT, terrazzo, marmoleum, linoleum, vinyl, asphalt, rubber, laminates, concrete, slate, brick, stone, granite, grout sealing and coloring, ceramic floors, and cabinet refinishing, and exterior wood refinishing or any other services and/or products similar to those offered under the Mr. Sandless system.
This restriction aims to protect Mr. Sandless's market position and prevent franchisees from diverting business or goodwill to competitors. However, there are exceptions to this restriction. A franchisee is allowed to operate another Mr. Sandless Business under a valid franchise agreement with the company. Additionally, the restriction does not apply to the ownership of less than five percent (5%) of any publicly held company, allowing for minor investments in publicly traded competitors.
This non-compete clause is a standard practice in franchising to safeguard the brand's interests and maintain a level playing field among franchisees. Prospective Mr. Sandless franchisees should carefully consider this restriction and ensure they are not in violation of this clause before entering into a franchise agreement. It is important to understand the full scope of what constitutes a "Competitive Business" and how the restriction may impact any existing or potential business interests.