Does the All Team franchisee acknowledge the reasonableness of the restrictions imposed in Section XI?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE acknowledges that the restrictions imposed in this Section are reasonable and their enforcement will not cause an undue burden upon FRANCHISEE's ability to earn a livelihood.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the franchisee acknowledges the reasonableness of the restrictions imposed in Section XI of the agreement. This acknowledgment signifies that the franchisee agrees that the non-compete and other limitations are fair and do not create an undue burden on their ability to earn a living. This acknowledgment is part of the legal agreement, indicating the franchisee's understanding and acceptance of these terms.
Section XI likely contains clauses related to non-competition during the term of the agreement and after termination, as well as other operational restrictions. By acknowledging the reasonableness of these restrictions, the franchisee is less likely to successfully challenge them in court should a dispute arise. This provides All Team with a stronger legal position to enforce these restrictions.
However, the FDD also states that if a court finds any of the restrictions to be illegal, invalid, or unenforceable, the court can reduce the limitation to make it enforceable. All Team also retains the right to reduce the scope of any covenant in Section XI without the franchisee's consent, effective immediately upon written notice. This flexibility allows All Team to adjust the restrictions as needed while maintaining the franchisee's agreement to their overall reasonableness.
Prospective franchisees should carefully review Section XI and understand the specific restrictions they are acknowledging as reasonable. They should consider how these restrictions might impact their future business activities, both during and after the franchise agreement. Seeking legal counsel to review these clauses is advisable to fully understand the implications of this acknowledgment.