Are the non-competition covenants in the Beverly Anns Cookie Franchise Owner Agreement considered independent of other covenants?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.2 Construction of Covenants. The parties agree that each such covenant related to non-competition will be construed as independent of any other covenant or provision of this Franchise Owner Agreement. If all or any portion of a covenant referenced in this Section 3 is held unreasonable or unenforceable by a court or agency having valid jurisdiction in a final decision to which we are a party, Owners agree to remain bound to the maximum extent permitted by law, as if that covenant were separately stated in and made a part of this Section 3.
- 3.3 Our Right to Reduce Scope of Covenants. Additionally, we have the right, in our sole discretion, to unilaterally reduce the scope of all or part of any covenant referenced in this Section 3 of this Franchise Owner Agreement, without Owners' consent (before or after any dispute arises), effective when we give Owners written notice of this reduction. Owners agree to comply with any covenant as so modified.
Source: Item 23 — RECEIPTS (FDD pages 57–235)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, the non-competition covenants within the Franchise Owner Agreement are designed to be independent of all other covenants or provisions. This means that if any part of the non-competition agreement is deemed unreasonable or unenforceable by a court, the remaining parts of the covenant will still be in effect to the maximum extent permitted by law. This ensures that Beverly Anns Cookie can still enforce the non-compete agreement as much as possible, even if some aspects are challenged.
This independence is further reinforced by the clause that if any portion of the non-competition covenant is deemed unenforceable, the Owners (franchisees) still agree to be bound to the maximum extent allowed by law. This suggests that Beverly Anns Cookie aims to maintain the broadest possible protection against competition from its franchisees, even if specific terms are altered or invalidated. Additionally, Beverly Anns Cookie retains the right to unilaterally reduce the scope of the non-competition covenants without the franchisee's consent, providing flexibility in enforcing these covenants.
For a prospective Beverly Anns Cookie franchisee, this means that the non-competition obligations are a significant and enduring part of the agreement. Even if some terms seem questionable, the franchisee should expect to be bound by the remaining enforceable parts. It also highlights the importance of carefully reviewing the non-competition terms with legal counsel to fully understand the restrictions and their potential impact on future business activities after the franchise agreement ends. The franchisee should also be aware that Beverly Anns Cookie can modify these covenants, potentially making them less restrictive, but always retaining some level of competitive restriction.