If a provision in the Cilantro Taco Grill agreement is declared invalid, what is the extent of its invalidity?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.5 Reduction of Time or Scope.
If the period of time or the geographic scope specified above, should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable.
In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Article 8 or any portion thereof, without Multi-Unit Operator's consent, effective immediately upon receipt by Multi-Unit Operator of written notice thereof, and Multi-Unit Operator agrees to forthwith comply with any covenant as so modified.
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, if any part of the non-compete agreement is deemed unreasonable, the restrictions will be reduced to what is considered reasonable. This means a court could adjust the time period or geographic scope to make the restriction enforceable.
Cilantro Taco Grill also has the right to reduce the scope of any covenant within the non-compete agreement. This can be done at their discretion, and becomes effective immediately once the franchisee receives written notice. The franchisee must then comply with the modified covenant.
This clause provides Cilantro Taco Grill with flexibility in enforcing the non-compete agreement, allowing them to modify the terms to ensure enforceability. It also means that a franchisee's obligations under the non-compete could change during the term of the agreement.