Corporate Espionage is so great in America that competitors will go to lengths to find out what your company has that makes it so much better than everyone elses. Often they will even go so far as to set up a dummy corporation or LLC and actually go thru the sales process to buy a franchise, sometimes even go thru the purchase process, just to get all the information they need to compete with you, using your proprietary methods.

This is why I came up with a clause in our franchise agreements which helped us in knowing who we are dealing with up front and what their interests really are. Below is one of the clauses we use;

7.16 Other Parties

If Franchisee is a partnership, joint venture, association, corporation, limited liability company or other legal entity, then all persons who have any beneficial interest in the Franchisee must execute this Franchise Agreement where indicated below and be bound jointly and severally by all the terms and provision hereof, and each such execution shall be a condition precedent to the grant by Franchisee of the Franchised Business.

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This made it very tough for a competitor to risk giving themselves away or opening them up for unfair business practice criminal investigations or civil lawsuits from us. It is unfortunate that the weaker, underwelming competitors have to cheat and lie just to keep up, but they are sub human and simply unworthy of mention on the evolutionary food chain. I use to feel sorry for them, but then that 15-second period ended, now we play tough, check six and steamroller these losers. Consider this in 2006.