If a court finds the non-compete covenants in the Bonchon franchise agreement unreasonable, what power does the court have according to the agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
If all or any portion of the covenants not to compete set forth in this Article 11 are held unreasonable, void, vague or illegal by any court or agency with competent jurisdiction over the parties and subject matter, the court or agency will be empowered to revise and/or construe the covenants to fall within permissible legal limits, and should not by necessity invalidate the entire covenants. You agree to be bound by any lesser covenant subsumed within the terms of this Article 11 as if the resulting covenants were separately stated in and made a part of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if a court or agency with jurisdiction finds any portion of the non-compete covenants unreasonable, void, vague, or illegal, it has the power to revise or construe the covenants. The aim is to bring the covenants within permissible legal limits, without necessarily invalidating the entire covenant.
This means that a court could modify the scope, duration, or geographic area of the non-compete agreement to make it enforceable. The franchisee agrees to be bound by any lesser covenant that results from such revisions, as if it were originally part of the agreement. This clause ensures that some form of non-compete restriction remains in place, even if the original terms are deemed too broad.
For a prospective Bonchon franchisee, this is important because it means that even if the initial non-compete terms seem overly restrictive, a court is more likely to modify them rather than strike them down completely. Franchisees should be aware that they will likely still be subject to some form of non-compete obligation, and should factor this into their decision-making process. It is advisable to seek legal counsel to understand the specific non-compete terms and their potential implications in the franchisee's jurisdiction.