If Buona seeks an injunction against a franchisee for violating the non-compete agreement, does the Buona franchise agreement allow the franchisee to use claims against Buona as a defense?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.4 Enforcement of Covenants Not to Compete. You acknowledge that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to us for which no adequate remedy at law will be available. Accordingly, you hereby acknowledge that we may seek to obtain the entry of an injunction prohibiting any conduct by you or your Owners in violation of the terms of the covenants not to compete set forth in this Agreement. You expressly agree that it may conclusively be presumed that any violation of the terms of said covenants not to compete was accomplished by and through your unlawful use of the Confidential Information. Further, you expressly agree that the existence of any claims you may have against us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by us of the covenants not to compete set forth in this Agreement. You further agree to pay all costs and expenses (including reasonable attorneys' and experts' fees) incurred by us in connection with the enforcement of those covenants not to compete set forth in this Agreement.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the franchise agreement specifies that franchisees cannot use claims against Buona as a defense if Buona seeks to enforce the non-compete agreement through an injunction. This means that even if a franchisee believes Buona has wronged them, they cannot use those grievances to justify violating the non-compete terms. This clause is designed to protect Buona's interests and confidential information by ensuring that franchisees adhere to the non-compete obligations regardless of any disputes they may have with the company.
This provision has significant implications for prospective franchisees. It means that if Buona believes a franchisee is violating the non-compete agreement, the franchisee cannot delay or prevent the enforcement of the injunction by raising separate claims against Buona. The franchisee must comply with the non-compete terms while pursuing any other legal claims independently. This could create a challenging situation for a franchisee who feels aggrieved but must still adhere to the non-compete agreement.
Buona includes a clause stating, 'You expressly agree that the existence of any claims you may have against us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by us of the covenants not to compete set forth in this Agreement.' Furthermore, the franchisee is responsible for covering all associated expenses, including attorney and expert fees, that Buona incurs while enforcing these non-compete terms. This arrangement is generally favorable to the franchisor, Buona, as it streamlines the enforcement of non-compete agreements and places the financial burden of any related legal battles on the franchisee.