What obligations does a Mr. Sandless franchisee have upon termination of the franchise agreement?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
On Termination of the Franchise Agreement, or on periodic request of Franchisor, Franchisee will immediately:
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.
This Agreement shall survive the Termination of the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, upon termination of the Franchise Agreement, the franchisee has specific obligations regarding internet advertising, telephone accounts, and adherence to non-compete clauses. Specifically, the franchisee must immediately transfer rights and interests in domain names, social media accounts, software accounts, website URLs, and hyperlinks related to the Mr. Sandless business to the franchisor. Similarly, the franchisee must transfer all rights and interests in telephone numbers and directory listings associated with the Mr. Sandless franchise.
Furthermore, the franchisee, along with their employees and contractors, is subject to non-compete restrictions for two years following the termination of their position with the franchisee. During this period, they are prohibited from engaging in or having any interest in businesses offering similar services such as wood floor refinishing, cleaning, or maintenance within the franchisee's designated territory, 50 miles of that territory, or 50 miles of any other Mr. Sandless business. This restriction does not apply if the individual has less than a 5% beneficial interest in a publicly held corporation.
The agreement explicitly states that it survives the termination of the Franchise Agreement, meaning these obligations continue even after the franchise relationship ends. The franchisee must also ensure that their successors, assigns, and affiliated entities are bound by these obligations. These measures protect Mr. Sandless's brand and market presence by preventing former franchisees from leveraging their knowledge and resources to compete against the franchise system after their agreement concludes.