Does the agreement state that the non-compete and non-solicitation covenants survive the expiration, termination, or cancellation of the Punch King Fitness Franchise Agreement?

According to Punch King Fitness's 2024 Franchise Disclosure Document, the non-compete and non-solicitation covenants do indeed survive the expiration, termination, or cancellation of the Franchise Agreement. Specifically, the agreement states that the franchisee and franchisor agree that the covenants within that section of the agreement will continue to be in effect even after the agreement ends, regardless of the reason for termination or cancellation. This ensures that the restrictions on competition and solicitation remain enforceable.

This survival clause has significant implications for a prospective Punch King Fitness franchisee. After the franchise agreement ends, the franchisee is still legally bound by the non-compete and non-solicitation clauses. This means that for a specified period (as detailed elsewhere in the FDD, typically two years), the former franchisee cannot operate a competing business within a certain radius of a Punch King Fitness location or solicit clients of the former franchise.

The agreement also states that all provisions of the agreement which, by their terms, are intended to survive the termination or expiration of the agreement (such as provisions relating to confidential information, indemnification, post-termination competition, and the Marks), and all provisions necessary to enforce and interpret such provisions, shall survive the termination, expiration, or cancellation of the agreement. This reinforces the long-term enforceability of key clauses designed to protect Punch King Fitness's interests.

Furthermore, the agreement specifies that if a franchisee violates the non-compete or non-solicitation provisions after the agreement expires or is terminated, the period during which they must comply with the breached obligation will be extended by two years from the date they cease the violation. This provision serves as an additional deterrent against breaching these covenants and underscores the importance of understanding and adhering to these post-termination obligations.