Franchise Focus: post termination non-compete – are you protected?

The grant of an injunction by the Irish High Court against a former Yoga Therapy franchisee serves as a stark reminder of the advantage of having professionally drafted post termination non compete restrictive covenants within a franchise agreement.

Yoga Therapy claimed that after terminating the franchise agreement (which contained non-compete provisions) in October 2011, its former franchisee, Ms Henkel Murphy, had been poaching its students by using confidential information which gave her an unfair competitive advantage which was damaging the franchisor’s business. The franchisor also claimed Ms Murphy was using source material belonging to the yoga centre to teach her students.

Under the terms of the court order, Ms Murphy is prohibited from operating yoga training courses in respect of students enrolled by her during the operation of the franchise agreement.