Can the non-competition restrictions in the Aw franchise agreement be modified by a court?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.2 Court Modification of Agreement. You agree that this form of Agreement is prepared for use in many jurisdictions with differing public policies and that such public policies change. Accordingly, you agree that the prevailing non-competition restrictions set forth above may be modified by a Court to the extent necessary to make the non-competition agreements valid and enforceable against you.
- 17.3 Enforcement of Covenants Not to Compete. You acknowledge that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to us for which no adequate remedy at law will be available. Accordingly, you hereby acknowledge that we may seek to obtain the entry of an injunction prohibiting any conduct by you or your Owners in violation of the terms of the covenants not to compete set forth in this Agreement. You expressly agree that it may conclusively be presumed that any violation of the terms of said covenants not to compete was accomplished by and through your unlawful use of our Confidential Information. Further, you expressly agree that the existence of any claims you may have against us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by us of the covenants not to compete set forth in this Agreement. You further agree to pay all costs and expenses (including reasonable attorneys' and experts' fees) incurred by the us in connection with the enforcement of those covenants not to compete set forth in this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the non-competition restrictions within the franchise agreement may be subject to modification by a court. Specifically, the agreement acknowledges that it is designed for use across various jurisdictions with differing public policies, which are also subject to change over time.
This provision means that if a non-competition clause is deemed overly broad or unenforceable under the laws of a specific jurisdiction, a court has the authority to modify the restrictions to make them valid and enforceable against the franchisee. This ensures that the non-competition agreements align with local public policies and legal standards.
Aw also emphasizes the importance of these covenants, stating that violations would result in immediate and irreparable harm for which there is no adequate legal remedy. Therefore, Aw may seek an injunction to prevent any conduct that violates these terms. The franchisee also agrees that any violation of these terms constitutes unlawful use of Aw's confidential information. Franchisees should be aware that any claims they may have against Aw will not be a valid defense against the enforcement of the non-compete agreements. Additionally, the franchisee is responsible for covering all costs and expenses, including attorney and expert fees, incurred by Aw in enforcing these non-competition agreements.