After termination, can a former Mr. Sandless franchisee own a Competitive Business?
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)
According to Mr. Sandless's 2025 Franchise Disclosure Document, a former franchisee is restricted from engaging in a competitive business for a period of two years after the termination of their franchise agreement. This restriction applies regardless of the reason for termination.
The competitive business activities that are prohibited include owning, maintaining, operating, consulting for, performing services for, or having any interest in a business that offers 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 includes selling products that are the same as or substantially similar to those offered by a Mr. Sandless Business.
This restriction applies within the franchisee's designated territory, fifty miles of the franchisee's designated territory, and fifty miles of any business operating under the Mr. Sandless system and proprietary marks. The non-compete clause does not prevent a former franchisee from owning less than 5% of a publicly held corporation's securities or engaging in activities related to a Mr. Sandless Franchised Business.
This non-compete agreement is common in franchising to protect the brand and system that Mr. Sandless has developed. Prospective franchisees should carefully consider these restrictions and how they might impact their future business opportunities should they decide to leave the Mr. Sandless system.