Ricardo operates a great health club and would like to sell franchises.He is concerned,however,that franchisees will take steps to terminate their franchise agreements in order to compete with him after learning his successful strategies for doing business.What contract provision should Ricardo put in the franchise agreements in order to provide himself with legal protection?

Question

Quizplus · Accepted Answer

Ricardo should include a covenant not to compete provision in the franchise agreements to prevent franchisees from using his successful strategies to compete with him after termination of the agreement. This provision would restrict the franchisees from opening a similar business within a specified geographic area and for a certain period of time. This would ensure that Ricardo's business remains successful even after termination of the franchise agreement.

Ricardo Operates a Great Health Club and Would Like to Sell