Can C3 Wellness Spa unilaterally reduce the scope of a restrictive covenant?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
| q. Non-competition covenants during the term of the franchise | 6 | No involvement in any competitive business and must comply with confidentiality, non-disclosure and non- solicitation covenants. |
|---|---|---|
| r. Non-competition covenants after the franchise is terminated or expires | 6, 17.E. | No involvement, ownership or interest whatsoever for 24 months in any competing business in: your Designated territory; a 25 mile radius of your Designated territory; a 25 mile radius of the Designated Territory of any other Spa Location Franchise; and you must comply with confidentiality, non-disclosure and non-solicitation covenants. |
| s. Modification of the agreement | 18.L. | Requires writing signed by you and us, except for unilateral changes that we may make to the Manuals or our unilateral reduction of the scope of a restrictive covenant that we may make in our discretion. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–50)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, C3 Wellness Spa can unilaterally reduce the scope of a restrictive covenant.
Specifically, the FDD states that modifications to the franchise agreement require a written agreement signed by both the franchisee and C3 Wellness Spa. However, there is an exception to this rule. C3 Wellness Spa retains the right to make unilateral changes to the manuals or unilaterally reduce the scope of a restrictive covenant at their discretion.
For a prospective franchisee, this means that while most changes to the franchise agreement require mutual consent, C3 Wellness Spa can independently lessen the restrictions placed on the franchisee through a restrictive covenant. This could potentially benefit a franchisee if C3 Wellness Spa decides to reduce the scope of non-compete obligations or other limitations, allowing for more business flexibility.