What covenants are outlined in section 16.2 of the Canine Dimensions COVI agreement?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
16.3 Exceptions to Covenants
Section 16.2 shall not apply to ownership by Franchisee of less than a five percent (5%) beneficial interest in the outstanding equity securities of any publicly-held corporation.
16.4 Severability; Tolling
The parties agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement. If all or any portion of a covenant in this Section 16 is held unreasonable or unenforceable by a court or agency having valid jurisdiction in an unappealed final decision to which Franchisor is a party, Franchisee expressly agrees to be bound by any lesser covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and made a part of this Article 16. Any period of time specified in this Article 16 will be tolled and suspended for any period of time during which Franchisee is in violation of any restrictive covenant.
16.5 Amendment of Covenants
Franchisee understands and acknowledges that Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant in Section 16.2, or any portion of it, without Franchisee's consent, effective immediately upon receipt by Franchisee of written notice of a reduction; and Franchisee agrees that it will immediately begin complying with any covenant as so modified, which shall be fully enforceable notwithstanding the provisions of Article 21.
16.6 Enforcement of Covenants
Franchisee agrees that the existence of any claims it may have against Franchisor, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by Franchisor of the covenants in this Article 16. Franchisee agrees to pay all costs and expenses (including reasonable attorney's fees) incurred by Franchisor in connection with enforcing this Article 16.
16.7 Violation of Covenants
Franchisee acknowledges that Franchisee's violation of the terms of this Article 16 would result in irreparable injury to Franchisor for which no adequate remedy at law may be available, and Franchisee accordingly consents to Franchisor's application for an injunction prohibiting any conduct by Franchisee in violation of the terms of this Article 16.
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, section 16.2, which outlines specific covenants, is mentioned in several other sections, but the actual text of section 16.2 itself is not provided in the excerpts.
However, the document does provide information regarding exceptions to these covenants in section 16.3, stating that section 16.2 does not apply to ownership by the franchisee of less than a five percent beneficial interest in the outstanding equity securities of any publicly-held corporation. Section 16.4 discusses the severability and tolling of these covenants, indicating that each covenant is independent and that any violation by the franchisee will suspend the time period specified in Article 16.
Section 16.5 allows Canine Dimensions to reduce the scope of any covenant in Section 16.2 with written notice, and the franchisee must immediately comply with the modified covenant. Section 16.6 states that any claims the franchisee has against Canine Dimensions do not constitute a defense against the enforcement of these covenants, and the franchisee must cover Canine Dimensions' enforcement costs, including attorney's fees. Section 16.7 acknowledges that violating Article 16 would cause irreparable harm to Canine Dimensions, entitling them to seek an injunction against the franchisee.
To fully understand the obligations under the Canine Dimensions franchise agreement, a prospective franchisee should request a full copy of section 16.2 from the franchisor. This section likely contains critical information about the franchisee's responsibilities and restrictions during and after the franchise term.