Under what condition regarding competition might the Aerus franchise agreement's covenant not to compete be unenforceable in California?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
Covenants not to compete during the term of and upon termination or expiration of the franchise agreement are enforceable only under certain conditions according to North Dakota law. If the Franchise Agreement contains a covenant not to compete that is inconsistent with North Dakota law, the covenant may be unenforceable.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
Based on the 2025 Aerus Franchise Disclosure Document, the excerpt provided does not contain information regarding the specific conditions under which the covenant not to compete might be unenforceable in California. The document does mention that covenants not to compete are only enforceable under certain conditions according to North Dakota law, and if the Franchise Agreement contains a covenant not to compete that is inconsistent with North Dakota law, the covenant may be unenforceable. However, this information pertains specifically to North Dakota and not California.
To fully understand the enforceability of the non-compete agreement in California, a prospective Aerus franchisee should consult with a legal professional experienced in California franchise law. They should also ask Aerus for clarification on how California law affects the enforceability of the non-compete clause in that state.
Specifically, the franchisee should seek clarification from Aerus regarding the specific conditions under California law that would render the non-compete agreement unenforceable. This might include limitations on geographic scope, time duration, or the nature of the competitive activities restricted.