What is the consequence of violating the non-solicitation provision after the expiration or termination of a Punch King Fitness Franchise Agreement?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 2. for a continuous and uninterrupted period commencing upon the expiration or termination of this Agreement (regardless of the cause for termination) and continuing for two (2) years thereafter, directly or indirectly solicit or perform services for any person who was a client of the Franchised Business at any time during the term of this Agreement.
- 3. Franchisee and Franchisor agree that the covenants contained in this Section shall survive the expiration, termination, or cancellation of this Agreement. In the event of the violation of this Section by Franchisee following expiration, termination, or assignment of this Agreement, the period of time Franchisee shall be required to abide by the breached obligation shall be extended to a period of two (2)
years after Franchisee is no longer in breach of such obligation.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, if a franchisee violates the non-solicitation provision after the expiration, termination, or assignment of the Franchise Agreement, the period during which the franchisee must abide by the breached obligation will be extended. This extension lasts for two years after the franchisee ceases to be in breach of the obligation.
In simpler terms, the initial non-solicitation restriction lasts for two years after the franchise agreement ends. However, if the franchisee violates this restriction, the two-year clock resets and restarts from the moment they stop violating the agreement. This means the franchisee could be subject to the non-solicitation clause for longer than the initial two-year period if they breach it.
This provision is designed to protect Punch King Fitness from unfair competition by former franchisees who might try to take clients away from the system. It ensures that franchisees are held accountable for their actions even after their franchise agreement has ended, and that the brand's customer base remains secure. Franchisees should be aware of this extended obligation and ensure they fully comply with the non-solicitation terms to avoid prolonged restrictions.