Do the obligations outlined in this section survive the termination of the Punch King Fitness franchise agreement?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
All provisions of this Agreement which, by their terms, are intended to survive the termination or expiration of this Agreement (such as, by way of illustration and not limitation, the provisions relating to confidential information, indemnification, post-termination competition, and the Marks), and all provisions hereof necessary to enforce and interpret such provisions (such as, by way of illustration and not limitation, the provisions relating to arbitration and injunctive relief), shall survive the termination, expiration or cancellation of this Agreement or the franchise granted hereunder.
Franchisee further covenants that, except as otherwise approved in writing by Franchisor, Franchisee shall not, directly or indirectly, for itself or through, on behalf of, or in conjunction with any person, persons, partnership, or corporation:
- 1. 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, own, maintain, operate, engage in, or have any interest in any business offering boxing and kickboxing, or any other services that had been offered by the Franchised Business, within twenty-five (25) miles of any Punch King Fitness Franchised Business; or
- 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.
Franchisee agrees that any idea or suggested innovation or variation that may tend to enhance or improve the Punch King Fitness Method that Franchisee develops, discovers, or otherwise becomes aware of during the term of this Agreement shall be submitted to Franchisor for its evaluation for adoption and use, and Franchisee agrees that all proprietary rights to such ideas, innovations, improvements, enhancements, or variations created or acquired by Franchisee or any of its employees shall belong exclusively to Franchisor and may be made available to all Punch King Fitness and Punch King Fitness franchisees and Punch King Fitness licensees.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to the 2024 Punch King Fitness Franchise Disclosure Document, several obligations do indeed survive the termination or expiration of the franchise agreement. These include provisions relating to confidential information, indemnification, post-termination competition, and the use of the Marks. Additionally, provisions necessary to enforce and interpret these surviving clauses, such as those concerning arbitration and injunctive relief, also remain in effect after the agreement ends.
Specifically, the franchisee is restricted from engaging in activities that could harm the goodwill associated with Punch King Fitness's brand and system, or from operating a competitive business offering boxing and kickboxing services. These restrictions extend for a period after the termination of the agreement.
The franchisee is prohibited for two years after termination from owning or operating a business offering boxing and kickboxing services within 25 miles of any Punch King Fitness franchise. They are also barred from soliciting or performing services for anyone who was a client of the franchise during the agreement's term for a period of two years. These covenants are designed to protect Punch King Fitness's market and client base even after a franchise agreement concludes.
Moreover, the franchisee's obligation to transfer proprietary rights for any innovations or improvements to the Punch King Fitness method to the franchisor survives the termination of the agreement. This ensures that any advancements made during the franchise operation ultimately benefit the entire Punch King Fitness system, even after the individual franchise relationship has ended.