Can a franchisee of Precision Door Service have a financial interest in a business similar to the franchise?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as otherwise approved in writing by Franchisor, you may not, directly or indirectly, through, on behalf of, or in conjunction with, any other person, partnership, or legal entity, own, maintain, operate, or engage or participate in, inure benefit to, or have any financial interest, either as an officer, agent, employee, principal, partner, director, shareholder or any other individual or representative capacity, in any corporation, partnership or other legal entity that engages in any business that is the same as or similar to the Franchise, or is otherwise in competition with the business of Franchisor or Franchisor's franchisees, that engages in the distribution of similar products, services and/or equipment and that is located (a) anywhere, while the Franchise Agreement is in effect or (b) (i) within the territory specified on the Data Sheet to the Franchise Agreement, (ii) within a 35-mile radius of the outer boundary of such territory, or (iii) inside the territory of another Precision Garage Door Service® business, in each case during a period of two (2) years commencing with the earlier of the termination of the Franchise Agreement or the date on which you cease to be associated with Franchisee (or the individual who is the principal of a legal entity identified as Franchisee) whether because of a termination of an employment arrangement or marriage or otherwise, which period shall be extended by any period of noncompliance.
You further agree that upon Franchisor's request you shall make his/her personal and business records available for inspection by Franchisor to determine your compliance with this provision.
Source: Item 22 — Contracts (FDD pages 91–92)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, franchisees are restricted from having a financial interest in similar businesses. During the term of the Franchise Agreement, a franchisee cannot own, maintain, operate, or participate in any business that is the same as or similar to the Precision Door Service franchise. This restriction extends to involvement as an officer, agent, employee, principal, partner, director, shareholder, or in any other representative capacity.
This restriction applies regardless of location while the Franchise Agreement is in effect. After the agreement terminates or the franchisee ceases to be associated with the Precision Door Service franchise, the restriction continues for two years. During this two-year period, the franchisee is prohibited from engaging in a similar business within their specified territory, within a 35-mile radius of that territory's outer boundary, or inside the territory of another Precision Door Service business. The non-compete period can be extended if the franchisee is non-compliant.
Precision Door Service also requires franchisees to make their personal and business records available for inspection to ensure compliance with these non-compete provisions. However, the franchisor can provide written approval to waive these restrictions.