Can a court modify the post-term covenant not to compete for an Aw franchise?

According to Aw's 2025 Franchise Disclosure Document, the franchise agreement is prepared for use in many jurisdictions with differing public policies that may change over time. As such, the agreement states that the non-competition restrictions may be modified by a court to the extent necessary to make the non-competition agreements valid and enforceable against the franchisee. This means that if a specific aspect of the non-compete agreement is deemed unenforceable under the laws of a particular jurisdiction, a court has the power to modify the terms to make it enforceable.

This clause is included because non-compete agreements are scrutinized differently across various states and jurisdictions. Some states may have stricter rules about the duration, geographic scope, or the types of activities that can be restricted. By including this clause, Aw aims to ensure that the non-compete is as enforceable as possible, given the specific legal environment.

For a prospective Aw franchisee, this is a double-edged sword. On one hand, it means that the non-compete agreement is more likely to be upheld in some form, preventing the franchisee from immediately opening a competing business nearby. On the other hand, it provides some reassurance that if the non-compete is overly restrictive, a court can step in to modify it to be more reasonable. Franchisees should be aware of the specific non-compete laws in their state and consult with an attorney to understand how they might apply to their situation with Aw.