Does the Baya Bar agreement state that the non-compete covenants are considered fair and reasonable?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
c. The parties acknowledge and agree that each of the covenants contained herein are reasonable limitations 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.
d. If the period of time or the geographic scope specified Section 2.b. above, should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable.
In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement or any portion thereof, without Covenantor's or Franchisee's consent, effective immediately upon receipt by Covenantor of written notice thereof, and Covenantor agrees to forthwith comply with any covenant as so modified.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the franchise agreement states that the parties acknowledge and agree that the non-compete covenants are reasonable. These limitations pertain to time, geographical area, and scope of activity and are deemed necessary to protect the goodwill and business interests of Baya Bar.
Specifically, the agreement states that the covenants do not impose a greater restraint than necessary to protect Baya Bar's interests. However, if any part of the non-compete agreement is judged unreasonable, the terms will be reduced in time or geographic scope to ensure enforceability.
Baya Bar also retains the right to modify the scope of any covenant within the agreement without the consent of the franchisee or covenantor, effective immediately upon written notice. Franchisees are responsible for ensuring that the covenantor complies with the agreement, and Baya Bar would be irreparably injured if the agreement is breached.