Can the non-competition terms in the Amorino Area Development Agreement be modified?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties have attempted in Sections 8.1 and 8.2 above to limit the Area Developer's right to compete only to the extent necessary to protect the Company from unfair competition. The parties hereby expressly agree that if the scope or enforceability of Section 8.1 or 8.2 is disputed at any time by Area Developer, a court or arbitrator, as the case may be, may modify either or both of such provisions to the extent that it deems necessary to make such provision(s) enforceable under applicable law. In addition, the Company reserves the right to reduce the scope of either, or both, of said provisions without Area Developer's consent, at any time or times, effective immediately upon notice to Area Developer.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, the non-competition terms within the Area Development Agreement can be modified under certain conditions. The agreement explicitly states that if the scope or enforceability of the non-compete clauses (Sections 8.1 and 8.2) is disputed by the Area Developer, a court or arbitrator has the authority to modify these provisions to ensure they are enforceable under applicable law. This suggests that the initial terms are subject to legal review and adjustment if deemed overly restrictive.
Additionally, Amorino retains the right to unilaterally reduce the scope of the non-compete provisions at any time without the Area Developer's consent. This modification becomes effective immediately upon notice to the Area Developer. This clause provides Amorino with flexibility to adjust the non-compete terms as business conditions change or as they deem necessary to protect their interests.
This ability for Amorino to modify the non-compete agreement unilaterally is a significant point for potential Area Developers. While the agreement aims to protect Amorino from unfair competition, the power to alter the terms rests solely with Amorino, potentially impacting the Area Developer's future business activities after the agreement's expiration or termination. Prospective Area Developers should carefully consider this aspect and seek legal counsel to fully understand the implications of these modification clauses.