If a covenant restricting competitive activity in the 7 Brew Franchise Agreement is deemed unenforceable, what will happen to the covenant?

According to 7 Brew's 2025 Franchise Disclosure Document, if a covenant restricting competitive activity is deemed unenforceable due to its scope regarding area, prohibited business activity, or length of time, 7 Brew and the franchisee agree that the covenant will be reformed. This reformation will modify the covenant to the extent necessary to make it reasonable and enforceable under the laws and public policies of the relevant jurisdiction. The covenant will then be enforced to the fullest extent permissible under those laws.

This means that if a court finds a non-compete clause too broad, it won't simply be thrown out. Instead, the court will attempt to rewrite the clause to make it legally sound and then enforce it within those revised boundaries. This could involve reducing the geographic area where competition is restricted, narrowing the types of business activities prohibited, or shortening the length of time the restriction is in place.

For a prospective 7 Brew franchisee, this is important because it highlights that non-compete obligations are taken seriously. Even if the initial terms seem overly restrictive, there's a mechanism in place to ensure some level of competitive restriction remains in effect, provided it's legally permissible. Franchisees should carefully consider the implications of these covenants and understand that they will likely be bound by a modified version if the original is deemed too broad.