If a court finds the non-compete agreement unreasonable, what is the intention of Bombs Away Franchising?
Bombs_Away 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 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 Bombs Away Franchising. Franchisee agrees that the existence of any claim it may have against Bombs Away Franchising shall not constitute a defense to the enforcement by Bombs Away Franchising 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 pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the company's intention regarding the non-compete agreement is to have the court or arbitrator modify the restriction to the extent reasonably necessary to protect the legitimate business interests of Bombs Away Franchising if all or any portion of the covenants in the non-compete section are held to be unenforceable or unreasonable by any court or arbitrator. Bombs Away states that each covenant within the agreement is independent of any other covenant or provision.
This means that if a court finds the non-compete agreement too broad or restrictive, Bombs Away intends for the court to revise the agreement to make it enforceable while still protecting Bombs Away's business interests. This is a fairly standard clause in franchise agreements, as non-competes are often challenged in court, and franchisors want to ensure some level of protection remains even if the original terms are deemed unreasonable.
Furthermore, the agreement specifies that any claims the franchisee may have against Bombs Away Franchising will not serve as a defense against the enforcement of the non-compete agreement by Bombs Away. Additionally, if a restricted party fails to comply with the obligations under the non-compete section during the restrictive period, the restrictive period will be extended by an additional day for each day of noncompliance. This highlights the importance Bombs Away places on franchisees adhering to the non-compete terms and the measures they will take to enforce it.