Does the Better Blend franchise agreement require the franchisee to comply with the agreement during the litigation process?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
Guarantor agrees that each of the foregoing covenants is independent of any other covenant or provision of this Guaranty or the Franchise Agreement.
If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any court or arbitrator, then the parties intend that the court or arbitrator modify such restriction to the extent reasonably necessary to protect the legitimate business interests of BBF.
Guarantor agrees that the existence of any claim it or Franchisee may have against BBF shall not constitute a defense to the enforcement by BBF of the covenants of this Section.
If Guarantor fails to comply with the obligations under this Section during the restrictive period, then the restrictive period will be extended an additional day for each day of noncompliance.
- **4.
Modification.** Guarantor agrees that Guarantor's liability hereunder shall not be diminished, relieved or otherwise affected by (a) any amendment of the Franchise Agreement, (b) any extension of time, credit or other indulgence which BBF may from time to time grant to Franchisee or to any other person or entity, or (c) the acceptance of any partial payment or performance or the compromise or release of any claims.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, the Better Blend franchise agreement stipulates that the existence of any claim the franchisee may have against Better Blend does not constitute a defense against the enforcement of the covenants within the agreement by Better Blend. This means that even if a franchisee has a pending lawsuit or claim against Better Blend, they must still adhere to all the terms and conditions outlined in the franchise agreement.
This requirement has significant implications for franchisees. It means that a franchisee cannot use a dispute with Better Blend as a reason to suspend their obligations under the franchise agreement. For example, they must continue to pay royalties, maintain the brand standards, and operate the business according to Better Blend's guidelines, even while pursuing legal action. Failure to do so could result in Better Blend taking further action against the franchisee for breach of contract.
This type of clause is relatively common in franchise agreements, as franchisors want to ensure that franchisees continue to operate their businesses properly and uphold brand standards, regardless of any disputes. However, it places a significant burden on the franchisee, who must bear the costs and risks of both pursuing a legal claim and maintaining compliance with the franchise agreement. Franchisees should seek legal counsel to fully understand their rights and obligations in the event of a dispute with Better Blend.
Furthermore, the Guarantor agreement states that the Guarantor agrees that each covenant is independent of any other covenant or provision of the Guaranty or the Franchise Agreement. If the Guarantor fails to comply with the obligations during the restrictive period, then the restrictive period will be extended an additional day for each day of noncompliance. The Guarantor's liability will not be affected by any amendment of the Franchise Agreement, any extension of time, or acceptance of any partial payment.