Under what condition will the post-termination non-competition covenant for a Bhc franchisee be amended or deleted?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
(b) If any valid, applicable law or regulation of a competent governmental authority having jurisdiction over this Agreement or the parties hereto limits Franchisor's rights under section 11.2(a) above, then the section will be deemed amended (or deleted) to conform to the requirements of such laws and regulations, but in such event (unless deleted) the provisions of the Agreement thus affected will be amended only to the extent necessary to bring it within the requirements of the law or regulation.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the post-termination non-competition covenant may be amended or deleted under specific legal circumstances. If a valid law or regulation from a governing authority with jurisdiction over the franchise agreement limits Bhc's rights under section 11.2(a), then the non-competition section will be adjusted or removed to comply with those legal requirements. However, if the section is only amended, the changes will be limited to what is necessary to meet the requirements of the law or regulation.
This provision ensures that the Bhc franchise agreement remains compliant with applicable laws. Franchisees should be aware that the enforceability of non-compete clauses can vary significantly by jurisdiction. Some states heavily restrict or even prohibit such clauses, while others are more lenient. This clause protects the franchisee from being held to a non-compete agreement that is deemed illegal or unenforceable in their specific location.
For a prospective Bhc franchisee, this means the specific terms of the post-termination non-compete could change based on where their franchise is located and the prevailing laws in that area. It is advisable to consult with an attorney to understand the enforceability of the non-compete agreement in their specific jurisdiction. This will help them assess the potential restrictions they may face if they decide to leave the Bhc system in the future.