What happens if a court determines that any restriction in the Aplus agreement is unreasonable or unenforceable?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Individual 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 Franchisee, Company, and Company's Trade Secrets and other Confidential Information, the Company's business system, network of franchises and trade and service marks, and Individual waives any right to challenge these restrictions as being overly broad, unreasonable or otherwise unenforceable. If, however, a court of competent jurisdiction determines that any such restriction is unreasonable or unenforceable, then Individual shall submit to the reduction of any such activity, time period or geographic restriction necessary to enable the court to enforce such restrictions to the fullest extent permitted under applicable law. It is the desire and intent of the parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under the laws and public policies applied in any jurisdiction where enforcement is sought.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if a court finds any restriction within the agreement to be unreasonable or unenforceable, the individual involved must agree to a reduction in the activity, time period, or geographic scope of the restriction. This reduction will be to the extent necessary for the court to enforce the restrictions as fully as permitted by law.
This clause ensures that Aplus aims to enforce the provisions of the agreement to the greatest degree allowed by law, even if the original terms are deemed too broad. It reflects a willingness to modify the restrictions to achieve enforceability rather than abandoning them altogether.
For a prospective Aplus franchisee, this means that while the initial agreement may contain certain restrictions, there is a mechanism in place to adjust those restrictions if they are challenged in court. This could impact non-compete clauses or other limitations on business activities after the franchise agreement ends. Franchisees should be aware that Aplus intends to enforce these restrictions as much as possible, even if it requires modification by a court.