If a Byrider franchisee terminates the agreement due to Byrider's breach, are the restrictions of Section 18.2 applicable?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. Termination.
Notwithstanding any other provision of this Agreement to the contrary, in the event Franchisee terminates this Agreement pursuant to Section 16.3 upon final determination by a court that the Company has breached this Agreement, the Company shall hold implementation of the provisions of Sections 17.1.D.E.F.G.H and 17.2 in abeyance for such reasonable period as is necessary, not to exceed ninety (90) days, for Franchisee to implement a transition of Franchisee's Business to new systems, new signage etc. all without charge therefor, and the restrictions of Section 18.2 shall be inapplicable.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to the 2025 Byrider Franchise Disclosure Document, if a franchisee terminates the agreement due to Byrider's breach, the restrictions outlined in Section 18.2 of the agreement will not apply. Specifically, if a court determines that Byrider has breached the agreement and the franchisee terminates as a result, Byrider will put the provisions of Sections 17.1.D.E.F.G.H and 17.2 on hold for up to 90 days. This 90-day period allows the franchisee to transition their business to new systems and signage without any charges.
This means that Byrider will not enforce certain post-termination obligations during this transition period, giving the franchisee some flexibility as they wind down their Byrider operations and set up a new business. The restrictions of Section 18.2, which likely involve non-compete clauses or other limitations on the franchisee's activities after termination, are specifically waived in this scenario.
This provision offers a significant benefit to franchisees who terminate due to Byrider's breach, as it provides a grace period to transition their business without being immediately subjected to potentially restrictive covenants. However, it is important to note that this is contingent upon a court's determination that Byrider breached the agreement, and the franchisee must still implement the transition within the 90-day timeframe.