Are there non-competition covenants after the franchise is terminated or expires for The Standardx franchisees?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary | |
|---|---|---|---|
| n. | Franchisor's right of first refusal to acquire franchisee's business | 1.5 and Exhibit C of Franchise Agreement | We only have right of first offer on transfers of the Hotel or a Controlling Ownership Interest in you if we and you sign Exhibit C. We will require Exhibit C only for certain markets that we determine are strategic to us. |
| o. | Franchisor's option to purchase franchisee's business | Not applicable | Not applicable. |
| p. | Death or disability of franchisee | 12.7 of Franchise Agreement | Upon death or incompetence of owner of a Controlling Ownership Interest in you or your controlling owner, representative must transfer to approved transferee within 6 months. |
| q. | Non-competition covenants during the term of the franchise | 4.2, 4.10 and 4.11 of Franchise Agreement | No covenant not to compete, but neither you nor Hotel management company may be a Competing Brand Owner. |
| r. | Non-competition covenants after the franchise is terminated or expires | Not applicable | Not applicable. |
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, there are no non-competition covenants for franchisees after the franchise is terminated or expires. The FDD outlines various provisions within the franchise agreement, including those related to non-competition.
Specifically, Item 17 addresses renewal, termination, transfer, and dispute resolution, providing a table that summarizes key aspects of the franchise agreement. This table explicitly states whether non-competition covenants exist during and after the franchise term.
For The Standardx, the table indicates that while there are non-competition considerations during the term of the franchise, with the franchisee and hotel management company not being allowed to be a Competing Brand Owner, there are no such covenants in place after the franchise is terminated or expires. This means that once the franchise agreement ends, a former franchisee is not restricted by The Standardx from engaging in similar business ventures.