Does the Aplus franchisee waive the right to challenge the restrictive covenants as overly broad, unreasonable, overly burdensome, or otherwise unenforceable?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee acknowledges that the restrictive covenants contained in this Section 7 are essential elements of this Agreement and that without their inclusion, Franchisor would not have entered into this Agreement. Franchisee acknowledges that each of the terms set forth herein, including the restrictive covenants, is fair and reasonable and is reasonably required for the protection of Franchisor, the System, the Marks, Franchisor's goodwill, and Franchisor's franchise system; and Franchisee expressly waives any right to challenge these restrictions as being overly broad, unreasonable, overly burdensome or otherwise unenforceable. Franchisee affirms that it has other means of earning a living from its employment experience prior to becoming a franchisee.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to the 2024 Aplus Franchise Disclosure Document, franchisees expressly waive the right to challenge the restrictive covenants in the franchise agreement. This waiver includes challenging the restrictions as overly broad, unreasonable, overly burdensome, or otherwise unenforceable. Aplus includes this provision because it considers the restrictive covenants essential for protecting the brand, the Aplus system, the trademarks, and the goodwill of the franchise network.
By agreeing to this waiver, a prospective Aplus franchisee acknowledges that the terms of the franchise agreement, including the restrictive covenants, are fair and reasonable. The franchisee also acknowledges that these restrictions are necessary to protect Aplus's interests. This waiver is part of the agreement that Aplus requires to grant a franchise.
This waiver has significant implications for franchisees. It limits their ability to legally challenge the enforceability of non-compete or other restrictive clauses, even if those clauses might seem unfair or overly restrictive in specific circumstances. Franchisees should carefully consider the scope and impact of these restrictive covenants before signing the franchise agreement, as their future business activities may be significantly limited, especially after the franchise term expires or terminates. It is advisable to seek legal counsel to fully understand the implications of this waiver.