Does the Checkersrallys franchise agreement allow the Franchisor or Franchisee to obtain an injunction against the franchisee for violating the non-compete covenants?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
I acknowledge that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to Franchisor and Franchisee, for which no adequate remedy at law will be available. Accordingly, I hereby consent to the entry of an injunction procured by Franchisor or Franchisee (or both), in any appropriate jurisdiction and venue (notwithstanding other references to resolution of actions exclusively in Franchisor's home prohibiting any conduct by me in violation of the terms of those covenants not to compete and/or restrictions on the use of Confidential Information under this Agreement. I expressly agree that it may conclusively be presumed in any legal action that any violation of the terms of these covenants not to compete was accomplished by and through my unlawful utilization of Franchisor's Confidential Information. Further, I expressly agree that any claims I may have against Franchisor will not constitute a defense to Franchisor's enforcement of the covenants not to compete under this Agreement. I further agree to pay all costs and expenses (including reasonable attorneys' and experts' fees) incurred by Franchisor in connection with the enforcement of those covenants not to compete set forth in this Agreement.
If all, or any portion of, this covenant not to use Confidential Information and not to compete is held unreasonable, void, vague or illegal by any court or agency having valid jurisdiction in an unappealed final decision to which Franchisee and/or Franchisor is a party, the court or agency will be empowered to revise and/or construe the covenant to fall within permissible legal limits, and should not invalidate the entire covenant. I expressly agree to be bound by any lesser covenant subsumed within the terms of this Agreement as if the resulting covenant were separately stated in and made a part of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, both Checkersrallys as the franchisor and the franchisee can seek an injunction against a franchisee who violates the non-compete agreements within the franchise agreement. The agreement states that any violation of the non-compete covenants would cause immediate and irreparable harm for which there would be no adequate legal remedy. Therefore, both Checkersrallys and the franchisee can obtain an injunction in any appropriate jurisdiction to prevent any conduct violating the non-compete terms or restrictions on using confidential information.
As a prospective Checkersrallys franchisee, this clause means you acknowledge that adhering to the non-compete agreements is critical. If you violate these covenants, Checkersrallys or another franchisee can immediately seek a court order (injunction) to stop you. This is a significant legal remedy, as it can quickly prevent you from engaging in competitive activities. The agreement also stipulates that any claims you might have against Checkersrallys will not serve as a defense against the enforcement of these non-compete covenants.
Furthermore, the franchisee agrees to cover all costs and expenses, including reasonable attorney and expert fees, that Checkersrallys incurs while enforcing the non-compete covenants. This could create a substantial financial burden for a franchisee found in violation. The agreement also specifies that if any part of the non-compete agreement is deemed unreasonable, the court can revise the covenant to make it permissible, ensuring that some form of non-compete obligation remains in effect. This highlights the importance Checkersrallys places on protecting its interests and the potential financial and legal ramifications for franchisees who breach these covenants.