What is the role of Punch King Fitness, Inc. in the Restrictive Covenant Agreement?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
y as proprietary and confidential information (Trade Secrets). Covenantor shall use such Trade Secrets solely for Franchisee's benefit and shall not, during the term of the Franchise Agreement or at any time thereafter, communicate, divulge, or use any Trade Secrets to or for the benefit of any other person, entity, or organization.
- 2. Proprietary Marks. Covenantor acknowledges Franchisor's right, title, and interest in and to the service mark Punch King Fitness, Punch King Fitness Systems, Franchisor's stylized design, and certain other proprietary service marks, logos, symbols, and trade names presently used by Franchisor or that Franchisor may hereafter use or provide for use by Franchisee, and the identification, schemes, standards, specifications, operating procedures, and other concepts embodied in Franchisor's franchise system (the
Marks). Covenantor further acknowledges that any use of the Marks outside the scope of the Franchise Agreement without Franchisor's prior written consent would be an infringement of Franchisor's rights in the Marks. Covenantor expressly covenants that he/she shall not, directly or indirectly, commit an act of infringement or contest, or aid in contesting, the validity or ownership of the Marks or take any other action in derogation thereof during the term of the Franchise Agreement or after the expiration or termination thereof pledges that his/her violation of any of the covenants contained in this Agreement would result in irreparable injury to Franchisor and Franchisee, for which no adequate remedy at law may be available, and accordingly consents to the issuance of, and agrees to pay all court costs and reasonable attorney fees incurred by Franchisor or Franchisee in obtaining, an injunction enjoining any conduct by Covenantor prohibited by the terms of this Agreement. This remedy shall be in addition to any and all other remedies that may be available to Franchisor or Franchisee.
- 3. Non-competition.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, Punch King Fitness, Inc., as the Franchisor, is a party to the Restrictive Covenant Agreement. This agreement outlines restrictions on the franchisee (referred to as Covenantor) regarding confidentiality, proprietary marks, and non-competition. The agreement is put in place as a condition for Punch King Fitness, Inc. granting the franchise to the franchisee.
The Restrictive Covenant Agreement protects Punch King Fitness, Inc.'s interests by preventing franchisees from using confidential information or competing with the franchise during and after the franchise term. Specifically, the franchisee acknowledges the confidential nature of Punch King Fitness's operating manual, sales and marketing methods, and other proprietary information. The franchisee also recognizes Punch King Fitness, Inc.'s ownership of trademarks and agrees not to infringe upon them.
Furthermore, the agreement includes a non-compete clause that restricts the franchisee from engaging in a similar business within 25 miles of any Punch King Fitness franchise for two years after the termination or expiration of the Franchise Agreement. This restriction does not apply if the franchisee owns less than 5% of a publicly traded company. The document states that violating the covenants would result in irreparable injury to Punch King Fitness and the franchisee, allowing Punch King Fitness to seek injunctive relief and recover legal costs.