What agreement do Belocal Franchisee and Principals make regarding the reasonableness of the covenants in the franchise agreement?

According to Belocal's 2025 Franchise Disclosure Document, the Franchisee and their Principals agree that the covenants within the franchise agreement have reasonable limitations regarding time, geographical area, and the scope of activities restricted. This agreement confirms that these limitations are not more restrictive than necessary to protect Belocal's goodwill or other legitimate business interests.

This acknowledgement is significant because it indicates that the franchisee and principals understand and accept the restrictions placed upon them, particularly concerning competition and confidentiality. By agreeing to the reasonableness of these covenants, the franchisee and principals may face a higher burden if they later attempt to challenge the enforceability of these restrictions in court.

Furthermore, the document states that each covenant is independent. If a court finds any part of a covenant unreasonable, the franchisee and principals agree to be bound by a lesser covenant that imposes the maximum duty permitted by law. Belocal also retains the right to reduce the scope of any covenant immediately upon notice, and the franchisee and principals must comply with the modified covenant. The time periods for non-compliance will be adjusted accordingly.