What happens if a provision of the Better Blend franchise agreement is deemed unenforceable?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
The parties agree that each of the foregoing covenants is independent of any other covenant or provision of this Agreement. If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any arbitrator or court, then the parties intend that the arbitrator or court modify such restriction to the extent reasonably necessary to protect the legitimate business interests of BBF. Franchisee agrees that the existence of any claim it may have against BBF shall not constitute a defense to the enforcement by BBF of the covenants of this Section. If a Restricted Party 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.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, if a court or arbitrator deems any part of the non-compete covenants within the franchise agreement unenforceable or unreasonable, the intention is for the court or arbitrator to modify the restriction. This modification would be to the extent reasonably necessary to protect the legitimate business interests of Better Blend.
This clause ensures that even if a specific part of the non-compete agreement is found to be too broad or restrictive, the entire agreement doesn't automatically become void. Instead, the court or arbitrator will adjust the problematic section to make it enforceable while still safeguarding Better Blend's business interests. This could mean reducing the geographic area or the time period of the non-compete clause.
This approach is fairly common in franchising, as franchisors seek to protect their brand and market presence without unduly restricting franchisees' future opportunities. It provides a mechanism for courts to balance the interests of both parties, ensuring that the non-compete is fair and reasonable under the specific circumstances. Prospective franchisees should understand that while the non-compete agreement may be modified, they are still likely to be bound by some form of restriction after the franchise relationship ends.