What happens if a Mr. Sandless franchisee violates the covenant not to compete?
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)
The 2025 Mr. Sandless Franchise Disclosure Document (FDD) outlines the terms of a covenant not to compete for individuals formerly associated with a Mr. Sandless franchise. According to Item 22, a former franchisee employee is restricted for two years after leaving their position.
This restriction prevents them from owning, operating, consulting for, or having any interest in a business that offers similar wood floor refinishing, cleaning, or maintenance services, or selling similar products. This non-compete applies within the franchisee's designated territory, or within 50 miles of that territory, or within 50 miles of any Mr. Sandless business. The restrictions do not apply if the individual has less than a 5% beneficial interest in the securities of a publicly held corporation or if their interests are connected to a Mr. Sandless Franchised Business.
It is important for prospective franchisees to understand these restrictions, as they also apply to former employees. Franchisees must ensure their employees are aware of and adhere to these covenants, as violations could have legal and financial repercussions for both the employee and the franchisee. The franchisee should consult the full franchise agreement for details.