What happens if I violate the terms of Section 11 of the Cinch I.T. agreement?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
and and acknowledge that We shall have the right, in Our sole discretion, to reduce the scope of any covenant set forth in Sections 11.1 and 11.2 in this Agreement, or any portion thereof, without Your consent, effective immediately upon receipt by You of written notice thereof, and You agree that You shall forthwith comply with any covenant as so modified, which shall be fully enforceable.
- 11.6 You expressly agree that the existence of any claims You may have against Us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by Us of the covenants in this Section 11. You agree to pay all costs and expenses (including reasonable attorneys' fees) incurred by Us in connection with the enforcement of this Section 11 provided We prevail in any or all of Our claims against You.
- 11.7 You acknowledge that Your violation of the terms of this Section 11 would result in irreparable injury to Us for which no adequate remedy at law may be available, and You accordingly consent to the issuance of an injunction by any court of competent jurisdiction or arbitrator having jurisdiction over the Agreement prohibiting any conduct by You in violation of the terms of this Section 11.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, if a franchisee violates the terms of Section 11 of the agreement, Cinch I.T. acknowledges that such violation would cause irreparable injury to the company. As a result, Cinch I.T. is entitled to seek an injunction from a court or arbitrator to stop the franchisee's violating conduct. This means Cinch I.T. can legally compel the franchisee to cease the actions that breach Section 11. Section 11 includes, but is not limited to, the covenant that for two years after the agreement expires or terminates, the franchisee will not engage in a similar business within 25 miles of a Cinch I.T. location.
Additionally, the franchisee is responsible for covering all costs and expenses, including reasonable attorney's fees, incurred by Cinch I.T. when enforcing Section 11, provided that Cinch I.T. prevails in its claims against the franchisee. This financial burden can be substantial, adding to the penalties for non-compliance.
Furthermore, the franchisee agrees that any claims they may have against Cinch I.T. do not serve as a defense against Cinch I.T.'s enforcement of the covenants in Section 11. This clause prevents franchisees from using counterclaims as a shield against fulfilling their obligations under the non-compete and confidentiality provisions. Cinch I.T. also has the right to reduce the scope of any covenant set forth in Sections 11.1 and 11.2 without the franchisee's consent, effective immediately upon written notice.