Under what conditions can the Franchisor of Aplus reduce the scope of the non-compete covenants?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- 10.2. Additional Provisions. The parties acknowledge and agree that Franchisor has the right, in its sole discretion, to reduce the scope of any covenant set forth in Sections 10.1, or any portion thereof, without your consent or the consent of any Owner, effective immediately upon delivery of written notice to the affected party; and you and each Owner agree that such person shall comply forthwith with any covenant as so modified, which shall be fully enforceable. You and each Owner expressly agree that the existence of any claims you may have against Franchisor, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by Franchisor of the covenants in this Article 10.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the franchisor has the right to reduce the scope of any non-compete covenant outlined in Section 10.1 of the franchise agreement. This reduction can be made at Aplus's sole discretion, without requiring the franchisee's or any owner's consent.
The reduction in scope becomes effective immediately once written notice is delivered to the affected party. The franchisee and any owner are obligated to comply with the modified covenant and acknowledge that it is fully enforceable. Any claims the franchisee may have against Aplus do not constitute a defense against the enforcement of these covenants.
This clause gives Aplus significant flexibility to adjust the non-compete terms as they see fit. For a prospective franchisee, this means the non-compete obligations could change during the term of the agreement. It is important to understand the potential implications of these changes and how they might affect the franchisee's future business activities should they leave the Aplus system. Franchisees should seek clarification on what circumstances might trigger such a modification and what recourse they have if they disagree with the changes.