Where in The Standardx Franchise Agreement are non-competition covenants during the term of the franchise outlined?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
| , no part or portion of the Mixed-Use Site may be used to operate: (i) a | |
|---|---|
| pawnshop, check-cashing business, gentlemen’s club, pornography retailer, or other sexually- | |
| oriented business, or (ii) a package liquor store, marijuana dispensary, or gambling business, | |
| without our prior written consent, which consent may be granted or withheld in our sole judgment, | |
| or (iii) a bar, lounge, club or similar establishment situated within 300 feet of any part of the Hotel’s | |
| interior footprint, whose revenues are derived more than 50% from the sale of alcoholic beverages, | |
| without our prior written consent, which consent will not be withheld unless we reasonably | |
| determine that the establishment might have a material negative impact on guests of the Hotel. | |
| Provision | Section in franchise or other agreement |
| n. Franchisor’s right of first refusal to acquire franchisee’s business | 1.5 and Exhibit C of Franchise Agreement |
| o. Franchisor’s option | Not applicable |
| to purchase | |
| franchisee’s | |
| business | |
| p. Death or disability of franchisee | 12.7 of Franchise Agreement |
| q. Non-competition covenants during the term of the franchise | 4.2, 4.10 and 4.11 of Franchise Agreement |
| r. Non-competition | Not applicable |
| covenants after the | |
| franchise is | |
| terminated or | |
| expires | |
| s. Modification of the agreement | 18.5 of Franchise Agreement; 15 of Central Services Agreement |
| t. Integration/merger clause | 18.5 of Franchise Agreement; 8(f) of Confidentiality Agreement; 14 of Central Services Agreement |
| u. Dispute resolution by arbitration or mediation | 14.1 of Franchise Agreement; 11 of Central Services Agreement |
| v. Choice of forum | 14.3 of Franchise Agreement; 11 of Central Services Agreement |
| Provision | Section in franchise or other agreement |
| w. Choice of law | 14.2 of Franchise Agreement; 8C of Confidentiality Agreement; 11 of Central Services Agreement Provision |
| k. | "Transfer" by franchisee – defined |
| l. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 75–81)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, Item 17 details provisions of the franchise agreement, including non-competition covenants during the term of the franchise. Specifically, the non-competition covenants during the term of the franchise are outlined in Sections 4.2, 4.10, and 4.11 of The Standardx Franchise Agreement. However, the FDD states that there is "no covenant not to compete". Instead, neither the franchisee nor the Hotel management company may be a Competing Brand Owner.
This means that while franchisees are not explicitly restricted from engaging in other business ventures, they are prohibited from owning or operating a competing hotel brand. This is a fairly common practice in the franchise industry, as franchisors want to protect their brand and market share.
Prospective franchisees should carefully review Sections 4.2, 4.10, and 4.11 of The Standardx Franchise Agreement to fully understand the scope and limitations of these non-competition provisions. It is important to understand what constitutes a "Competing Brand Owner" and what activities might be considered a violation of this clause. Franchisees should also consider how this restriction might impact their future business opportunities and plans.