Does the Mr. Sandless non-compete agreement apply if the franchise agreement is terminated?
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.
3.7 Survival.
This Agreement shall survive the Termination of the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the non-compete agreement remains in effect even after the franchise agreement is terminated. Specifically, the Confidentiality and Non-Competition Agreement that franchisees sign is designed to survive the termination of the Franchise Agreement. This means that the restrictions outlined in the non-compete, such as limitations on operating similar businesses, continue to apply.
The Mr. Sandless non-compete agreement restricts franchisees from engaging in specific activities for a period of two years after the termination of their franchise agreement. This includes owning, maintaining, operating, consulting for, performing services for, or having any interest in businesses that offer wood floor refinishing, wood free care, wood floor cleaning, floor maintenance, outdoor wood refinishing, wood care, wood cleaning, wood maintenance, concrete cleaning and sealing, and other forms of outdoor refinishing, cleaning and maintenance. It also restricts selling products that are the same as or substantially similar to those offered by Mr. Sandless.
The restrictions apply within the franchisee's designated territory, fifty miles of that territory, and fifty miles of any other Mr. Sandless business. However, these restrictions do not apply to interests or activities performed in connection with another Mr. Sandless Franchised Business, or ownership of less than 5% of the securities of a publicly held corporation. This ensures that even after a franchisee leaves the Mr. Sandless system, they cannot directly compete in a defined geographical area for a specific time period, protecting Mr. Sandless's market and proprietary business methods.