I’ve been reading up on them, and understand that these are some of the “rules” for protecting legitimate business interests in a non-compete:
1. Protecting Trade Secrets
2. Maintaining valuable confidential business or professional information
3. Preserving relationships with specific prospective or existing customers, patients, or clients
4. Defending goodwill associated with an ongoing business or professional practice, by way of a trademark, geographic location, or marketing/trade area
5. Maximizing Investment In Extraordinary Or Specialized Training
I’m having trouble understanding number 4 only. Can someone please provide a brief explanation of what it means?
Thank you so much!
Categorized | Affiliate Marketing 101
Non-compete In Florida?
Posted on September 7, 2011.
“Goodwill” could also be called “brand recognition.” For instance, if you were to buy McDonald’s, not only would you pay for the physical cost of the company, you would pay for the “goodwill” that McDonald’s has, which is pretty significant. The same goes for a local company, only on a lesser scale. It’s the idea that an established business is worth more than a new company because people in the community that business serves recognize it, know about it, and realize its quality.
Number 4 is “defending goodwill … by way of trademark,.. location or … trade area.”
This means the non-competition agreement prevents employees or others from coat-tailing upon the value in the brand created by the employer by using similar brands, selling similar goods in the same locations, or through similar trade channels.
In other words, in exchange for allowing you access to my business secrets, you must agree not to use them to open ANY new business around mine or trying to trade with my customers, even if all you’re doing is exploiting my inability or lack of desire to do the same thing.