Does the Anago agreement state that the Subfranchisor acknowledges the non-compete terms are fair and reasonable?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that the scope, length of the term and geographical restrictions contained in this Section are fair and reasonable and not the result of overreaching, duress or coercion of any kind. You agree that Your full, uninhibited and faithful observance of each of the covenants in this Section will not cause any undue hardship, financial or otherwise, and that enforcement of each of the covenants in this Section will not impair Your ability to obtain employment commensurate with Your abilities and on terms fully acceptable to You or otherwise to obtain income required for the comfortable support of yourself and Your family, and the satisfaction of Your creditors. You agree that Your special knowledge of the business of an Anago Unit Franchise (and anyone acquiring this knowledge through You) would cause Us and Our Unit Franchisees serious injury and loss if You (or anyone acquiring this knowledge through You) were to use this knowledge to the benefit of a competitor or were to compete with Us or any of Our Unit Franchisees.
You agree and acknowledge that the rights covered by this ARTICLE 13 are unique and special in nature and We will not have an adequate remedy at law in the event of Your failure to abide by the terms of this ARTICLE 13. Therefore, You agree that for any violation or anticipated violation of any covenant contained in this ARTICLE 13, We shall be entitled to a temporary restraining order, temporary and/or preliminary injunction, and/or permanent injunction against You for such violation, whether anticipated or real, without requiring that We provide bond or other security, and We shall be entitled to a decree of specific performance enforcing the terms of this ARTICLE 13. Nothing contained in this ARTICLE 13 shall prohibit Us from pursuing any other legal or equitable remedy available to Us by law.
If any court finally holds that the time or territory or any other provision in this Section is an unreasonable restriction upon You, You agree that the provisions of this Agreement are not rendered void, but apply as to the scope, time and territory or to any other extent as the court may judicially determine or indicate is a reasonable restriction under the circumstances involved.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to the 2025 Anago Franchise Disclosure Document, the agreement stipulates that the Subfranchisor acknowledges the fairness and reasonableness of the non-compete terms. Specifically, it states that the Subfranchisor agrees that the scope, length, and geographical restrictions within the agreement are fair, reasonable, and not a result of any duress or coercion. This acknowledgment is a crucial part of the agreement, indicating that the Subfranchisor enters the agreement with a clear understanding and acceptance of these terms.
Furthermore, the agreement emphasizes that the Subfranchisor's adherence to these covenants will not cause undue hardship and will not impair their ability to secure suitable employment or income. This clause aims to ensure that the non-compete provisions are not overly restrictive to the point of preventing the Subfranchisor from earning a livelihood. The agreement also recognizes the unique knowledge the Subfranchisor gains about the Anago Unit Franchise business and the potential harm that could arise if this knowledge were used to benefit a competitor.
Anago also states that it will not have an adequate remedy at law if the Subfranchisor violates the non-compete terms, entitling Anago to seek injunctive relief, including temporary restraining orders and injunctions, without needing to provide a bond or security. This provision underscores the importance Anago places on protecting its business interests and proprietary information. It also ensures that Anago can act swiftly to prevent any potential competitive harm resulting from a breach of the non-compete agreement.
Finally, the agreement includes a clause addressing the possibility that a court might find any of the restrictions unreasonable. In such a case, the agreement remains valid, but the restrictions will be modified to the extent deemed reasonable by the court. This ensures that the non-compete provisions are enforceable to the fullest extent permitted by law, while also providing a mechanism for adjusting the terms if necessary to comply with legal standards.