If a court revises the non-compete covenants in the Bonchon franchise agreement, does the franchisee still have to abide by the revised covenants?
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 deems any part of the non-compete covenants unreasonable, void, vague, or illegal, it has the power to revise or interpret the covenants to align with legal limits. The franchisee expressly agrees to be bound by any lesser covenant that results from such revisions, as if it were originally part of the agreement. This ensures that the non-compete remains enforceable to the maximum extent permissible by law. This clause aims to prevent the entire non-compete agreement from being invalidated due to a single unenforceable provision.
This means that a Bonchon franchisee is obligated to adhere to the revised non-compete terms determined by the court or agency. The franchisee cannot argue that the original, broader terms should apply or that the entire non-compete is invalid. Instead, they must comply with the modified restrictions. This is a fairly standard practice in franchising, as franchisors seek to protect their business interests while ensuring compliance with applicable laws.
For a prospective Bonchon franchisee, this clause highlights the importance of understanding the non-compete provisions and the potential impact of revisions. It is advisable to consult with an attorney to assess the enforceability of the non-compete in their specific jurisdiction and to understand the implications of agreeing to be bound by revised terms. This also underscores the need to carefully consider the scope and duration of the non-compete before entering into the franchise agreement, as any revisions will still be binding.