In the Casiola franchise agreement, what happens if a specification prescribed by the franchisor is deemed unenforceable?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
- (2) If any applicable and binding law or rule requires a greater prior notice of the termination of this Agreement than is required in this Agreement, or the taking of some other action not required by this Agreement, or if under any applicable and binding law or rule, any term and condition of this Agreement, or any specification, standard, or operating procedure Franchisor prescribes is invalid or unenforceable, then the greater prior notice and/or other action required by law or rule shall be substituted for the comparable provisions, and Franchisor has the right, in its sole discretion, to modify the invalid or unenforceable term and condition, specification, standard, or operating procedure to the extent required to be valid and enforceable.
Franchisee agrees to be bound by any such substituted and/or modified term and condition of this Agreement imposing the maximum duty permitted by law that is prescribed within the terms of any provision of this Agreement as though it were originally and separately articulated in, and made a part of, this Agreement as of the Effective Date and/or any specification, standard or operating procedure Franchisor prescribes, which may result from striking from any terms and conditions, specifications, standards, or operating procedures, and any portion or portions thereof, a court may hold to be unenforceable or from reducing the scope of any promise or covenant to the extent required to comply with a court order.
Modifications to this Agreement shall be effective only in those jurisdictions in which such terms and conditions, specifications, standards, or operating procedures are found to be unenforceable, unless Franchisor elects to give them greater applicability, in which case, this Agreement shall be enforced as originally made in all other jurisdictions.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, if any term, condition, specification, standard, or operating procedure that Casiola prescribes is deemed invalid or unenforceable under applicable law, Casiola has the right to modify the unenforceable item to the extent required to make it valid. The modified term will then be binding on the franchisee.
This means that if a court or regulatory body finds a specific requirement in the franchise agreement or operations manual to be illegal or unenforceable, Casiola isn't necessarily prevented from enforcing a similar requirement. Instead, Casiola can change the requirement to comply with the law and then require the franchisee to follow the revised specification. This ensures that Casiola can maintain its standards and operating procedures to the fullest extent allowed by law.
The franchisee agrees to be bound by any substituted or modified term, condition, specification, standard, or operating procedure, imposing the maximum duty permitted by law. Modifications to the agreement are effective only in those jurisdictions where the original terms were found unenforceable, unless Casiola chooses to apply them more broadly. In other jurisdictions, the original agreement remains in effect.
This clause protects Casiola's ability to maintain uniformity and standards across its franchise system while also ensuring compliance with applicable laws. For a prospective franchisee, this means understanding that the franchise agreement and operating procedures can evolve based on legal challenges and that they will be obligated to adhere to these changes.