Does the Bath Tune Up agreement state that the franchisee acknowledges the covenants are reasonable?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) Franchisee acknowledges that each of the covenants contained in this section is a reasonable limitation as to time, geographical area, and scope of activity to be restrained, and do not impose a greater restraint than is necessary to protect the goodwill or other business interests of Franchisor. Each of the covenants in this section will be construed as independent of any other covenant or provision of this Agreement. If all or any portion of a covenant in this section is held unreasonable or unenforceable by a court or agency having valid jurisdiction in an unappealed final decision to which Franchisor is a party, Franchisee expressly agrees to be bound by any lesser covenant subsumed within the terms of the covenant that imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and made a part of this section. This section will not apply to the ownership of less than a 1% beneficial interest in the outstanding equity securities of any publicly held company.
- (e) Franchisee understands and acknowledges that Franchisor may, in its sole discretion, reduce the scope of any covenant in this section without Franchisee's consent, effective immediately upon notice to Franchisee. Franchisee agrees that any covenant as so modified will be fully enforceable, and Franchisee covenants that it will comply with the modified covenant.
- (f) Franchisee expressly agrees that the existence of any claims it may have against Franchisor, whether or not arising from this Agreement, will not constitute a defense to the enforcement by Franchisor of the covenants in this section.
- (g) Franchisee must require and obtain signing of covenants similar to those set forth in this section (including covenants applicable upon the termination of a person's employment with Franchisee) from its Manager. Additionally, at Franchisor's request, Franchisee will require and obtain signing of similar covenants to those identified in the preceding sentence from any personnel of Franchisee who have received or will have access to training from Franchisor. Franchisee will also require all people who Control Franchisee or who own (directly or indirectly) 10% or more of Franchisee to sign similar covenants. Any covenants required under this section will be substantially in the form of this section.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, the franchisee acknowledges that the covenants within the agreement are reasonable. Specifically, the franchisee agrees that the limitations regarding time, geographical area, and scope of activity are reasonable and do not impose unnecessary restrictions to protect Bath Tune Up's goodwill and business interests.
Furthermore, the agreement states that each covenant is independent. If a court deems any part of a covenant unreasonable or unenforceable, the franchisee agrees to adhere to the maximum duty permitted by law within that covenant. This ensures that even if specific clauses are challenged, the franchisee remains bound by the broadest enforceable interpretation.
Bath Tune Up also retains the right to modify the scope of any covenant without the franchisee's consent, effective immediately upon notification. The franchisee agrees to comply with these modified covenants. Additionally, any claims the franchisee may have against Bath Tune Up do not constitute a defense against the enforcement of these covenants. This section also requires franchisees to ensure their managers and certain personnel who receive training from Bath Tune Up sign similar covenants, along with anyone who controls or owns 10% or more of the franchise.