What specific actions are prohibited under the non-solicitation covenant for Punch King Fitness franchisees?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
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**.
Covenantor covenants that, during the term of the Franchise Agreement and for a continuous and uninterrupted period commencing upon the expiration or termination of the Franchise Agreement (regardless of the cause for termination) and continuing for two (2) years thereafter, directly or indirectly, for him/herself or through, on behalf of, or in conjunction with any person, entity or organization, own, maintain, operate, engage in, or have any interest in, any business offering boxing and kickboxing or any other products or services that have been offered by the Franchised Business, within twenty-five (25) miles of any Punch King Fitness Franchised Business.
This restriction shall not apply to the beneficial ownership by Covenantor of less than five percent (5%) of the outstanding equity securities of any corporation whose securities are registered under the Securities and Exchange Act of 1934.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
The 2024 Punch King Fitness Franchise Disclosure Document outlines specific restrictions related to confidentiality, proprietary marks, and non-competition that a franchisee (referred to as "Covenantor" in this section) must adhere to.
According to the FDD, Covenantors are restricted from divulging or using any of Punch King Fitness's trade secrets for the benefit of any other person, entity, or organization, both during and after the term of the Franchise Agreement. Trade Secrets include the Operating Manual, unique sales and marketing methods, pricing techniques, promotional materials, new product development, financial information, client or referral lists, and procedures for efficient operation. Franchisees also cannot infringe upon or contest the validity or ownership of Punch King Fitness's service marks, logos, symbols, and trade names.
The non-competition covenant states that during the term of the Franchise Agreement and for two years after its expiration or termination, the Covenantor cannot directly or indirectly own, maintain, operate, engage in, or have any interest in any business offering boxing and kickboxing or any other products or services offered by the Franchised Business within 25 miles of any Punch King Fitness Franchised Business. This restriction does not apply to the beneficial ownership of less than 5% of the outstanding equity securities of any corporation registered under the Securities and Exchange Act of 1934. Violation of these covenants can result in irreparable injury to Punch King Fitness, potentially leading to injunctions and the franchisee being responsible for court costs and attorney fees.