Does the Byrider franchisee agree not to contest an application for an injunction by the company for violating the non-compete agreement?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.4 Enforcement of Covenants Not To Compete. The Franchisee acknowledges that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to the Company for which no adequate remedy at law will be available. Accordingly, the Franchisee hereby acknowledges the Company's right to seek an injunction and agrees not to contest any application by the Company for such injunction to prohibit any conduct by the Franchisee in violation of the terms of those covenants not to compete set forth in this Agreement. The Franchisee expressly agrees that it may be conclusively presumed that a violation of the terms of said covenants not to compete was accomplished by and through the Franchisee's unlawful utilization of the Company's Confidential Information, know-how, methods and procedures. Further, the Franchisee expressly agrees that the existence of any claims it may have against the Company, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by the Company for the covenants not to compete set forth in this Agreement.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to the 2025 Byrider Franchise Disclosure Document, a franchisee acknowledges that violating the non-compete agreements would cause immediate and irreparable harm to Byrider. As a result, the franchisee agrees not to contest any application by Byrider for an injunction to prohibit any conduct violating the non-compete terms outlined in the agreement. The franchisee also agrees that it may be presumed that a violation of the non-compete terms was accomplished through the franchisee's unlawful use of Byrider's confidential information, know-how, methods, and procedures.
This means that if a Byrider franchisee violates the non-compete agreement, Byrider can seek an immediate court order (injunction) to stop the franchisee's actions. The franchisee, by agreeing to this clause, gives up their right to challenge Byrider's request for this injunction. This is a significant point for potential franchisees to consider, as it limits their legal recourse if they are accused of violating the non-compete agreement.
Furthermore, the agreement specifies that any claims the franchisee may have against Byrider do not serve as a defense against the enforcement of the non-compete covenants. This means that even if Byrider owes the franchisee money or has allegedly breached the agreement, the franchisee cannot use these issues to justify violating the non-compete agreement. Byrider can still enforce the non-compete agreement regardless of any other disputes between the parties.
This type of clause is not uncommon in franchise agreements, as franchisors seek to protect their brand, trade secrets, and customer relationships. However, prospective franchisees should carefully consider the implications of agreeing not to contest an injunction, as it can significantly impact their ability to defend themselves in a legal dispute.