In the Beggars Pizza agreement, what happens if a court reduces the scope of any promise or covenant?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 24.4 Promises and Covenants. Franchisee expressly agrees to be bound by any promise or covenant imposing the maximum duty permitted by law which is subsumed within the terms of any provision hereof as though it were separately articulated in and made a part of the Agreement that may result from striking from any of the provisions hereof any portion or portions which a court or agency having valid jurisdiction may hold to be unreasonable and unenforceable in an unappealed final decision to which Franchisor is a party, or from reducing the scope of any promise or covenant to the extent required to comply with such a court or agency order.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Beggars Pizza Franchise Disclosure Document, the franchise agreement specifies what happens if a court finds any part of the agreement to be unreasonable or unenforceable. Specifically, if a court reduces the scope of any promise or covenant within the agreement, the franchisee expressly agrees to be bound by the maximum duty permitted by law.
This means that if a court determines a specific provision is too broad or restrictive, the franchisee is still obligated to adhere to the closest legally enforceable version of that provision. The original intent of the provision will be upheld to the greatest extent possible under the law. This ensures that the core principles of the agreement remain intact even if specific clauses are modified by a court.
For a prospective Beggars Pizza franchisee, this clause highlights the importance of understanding all aspects of the franchise agreement. Even if certain parts seem overly restrictive, the franchisee is agreeing to be bound by the maximum duty permissible by law, should a court intervene to modify those specific terms. This could impact various aspects of the franchise operation, including competitive restrictions or operational requirements.