Can the non-compete restrictions in the Better Blend Agreement be modified by an arbitrator or court?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- (c) Interpretation. 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, the non-compete covenants within the Franchise Agreement can be modified by an arbitrator or court. Specifically, if any part of the non-compete agreement is deemed unenforceable or unreasonable, the parties intend for the arbitrator or court to modify the restriction. This modification should be to the extent reasonably necessary to protect the legitimate business interests of Better Blend Franchising, LLC (BBF).
This clause ensures that the non-compete provisions are not overly broad or unduly restrictive. It provides a mechanism for adjusting the restrictions to be fair and reasonable, balancing the franchisee's ability to work and Better Blend's need to protect its business. The agreement also states that any claims the franchisee may have against Better Blend do not constitute a defense against the enforcement of these non-compete covenants.
Furthermore, if a restricted party fails to comply with the non-compete obligations during the restrictive period, the period will be extended by an additional day for each day of noncompliance. This provision serves as an additional deterrent against violating the non-compete terms. This clause is included in both the general Franchise Agreement and the Guaranty and Non-Compete Agreement, ensuring consistent interpretation and enforcement.