If a court finds the non-compete period for Baya Bar unreasonable, how will the period be adjusted?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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 the 2024 Baya Bar Franchise Disclosure Document, if a court finds the non-compete agreement's time or geographic scope unreasonable, the restrictions will be adjusted. The time period will be reduced by a number of months, the geographic scope will be reduced by eliminating a portion of it, or both. This ensures the restrictions are enforceable for a time and scope deemed reasonable by the court.
This clause protects Baya Bar by ensuring that even if the original non-compete terms are deemed too restrictive, some level of restriction remains enforceable. It also provides clarity to the franchisee, as it outlines the process for how the non-compete terms will be modified rather than simply being voided.
Additionally, Baya Bar retains the right to unilaterally reduce the scope of any covenant in the agreement without the franchisee's consent. This modification becomes effective immediately upon written notice to the franchisee, who must then comply with the adjusted covenant. This clause gives Baya Bar flexibility to adjust the non-compete terms as needed to protect its interests while ensuring the terms are reasonable and enforceable.