Must a Mr. Sandless franchisee comply with non-competition and confidentiality obligations upon termination/non renewal?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN | SUMMARY | |
|---|---|---|---|
| FRANCHISE AGREEMENT | |||
| a. Length of the | 3.1 | 10 years | |
| franchise term | |||
| b. Renewal or extension of the term | 3.2 | If you have complied with the Franchise Agreement and certain conditions, you may enter into a successor franchise agreement for the franchise for 2 consecutive additional 5-year terms. | |
| c. Requirements for | 3.2 | You must be in compliance with the Franchise | |
| franchisee to renew or | Agreement; must have satisfied all monetary | ||
| extend | obligations owed to us and our affiliates; must be in | ||
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY | |
| t. Integration/merger clause | 25.1 | Only the terms of the Franchise Agreement are binding (subject to applicable federal and/or state law). Any representations or promises outside of the Franchise Disclosure Document and other agreements may not be enforceable. Nothing in the agreement or in any related agreement is intended to disclaim the representations made in the Franchise Disclosure Document. | |
| u. Dispute resolution by arbitration or mediation | 24.2, 24.3 | You must bring any dispute or claim to our President first for discussion before you may bring the dispute to a third party. At our option, all claims or disputes relating to the Franchise Agreement must be submitted first to mediation in Delaware County, Pennsylvania under the National Franchise Mediation Program (“NFMP”) in accordance with the NFMP’s mediation rules then in effect.(subject to state law) | |
| v. Choice of forum | 24.6 | Subject to state law, for any dispute not subject to or not resolved by mediation, the parties agree to litigate only in a court of general jurisdiction in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania. | |
| w. Choice of law | 24.1 | Agreement is governed by the laws of Pennsylvania. (subject to state law) | |
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY information or copyrights; failure to conduct grand opening advertising when required; abandonment of your Business; loss of lease; our requirements for transfer upon death or disability are not complied with; violation of non-competition covenant; failure to meet minimum performance criteria (if you own a Mr. Sandless Business); repeated violations of the Franchise Agreement (whether or not cured) | |
| i. | Franchisee's obligations on termination/ non renewal | 23 | You must pay all monies due; stop using the Proprietary Marks; cancel and/or transfer all registrations and phone numbers under the name "Mr. Sandless" return the Operations Manual and all Confidential Information; maintain your books and records for at least one year; provide us with list of employees and employee files; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, a franchisee must comply with non-competition and confidentiality obligations after the termination or non-renewal of the franchise agreement. Specifically, Section 23 of the franchise agreement outlines the franchisee's obligations upon termination or non-renewal, which include complying with non-competition and confidentiality obligations.
This means that after the franchise agreement ends, the franchisee is still bound by certain restrictions to protect Mr. Sandless's business interests. These restrictions typically prevent the franchisee from engaging in activities that directly compete with Mr. Sandless within a specified geographic area and time frame. The franchisee must also maintain the confidentiality of sensitive business information, such as trade secrets, customer lists, and operational procedures.
It is important for prospective Mr. Sandless franchisees to carefully review the specific terms of the non-competition and confidentiality clauses in the franchise agreement. These clauses can significantly impact the franchisee's ability to operate a similar business or work for a competitor after the franchise agreement ends. Additionally, the Indiana State Addendum specifies that any post-term non-compete covenant must not extend beyond the franchisee's designated territory, offering some geographic limitation to the restriction within that state.