If Cinch I.T. modifies a covenant, must the franchisee comply with the modified covenant?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.5 You understand 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.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, Cinch I.T. has the right to reduce the scope of certain covenants without the franchisee's consent. Specifically, Cinch I.T. can modify covenants outlined in Sections 11.1 and 11.2 of the franchise agreement.
If Cinch I.T. chooses to modify these covenants, it becomes effective immediately once the franchisee receives written notice. The franchisee is then obligated to comply with the modified covenant, and the modified covenant will be fully enforceable.
This clause gives Cinch I.T. significant flexibility to adjust the restrictions placed on franchisees. While the franchisor can reduce the scope of the covenant, it does not imply that they can expand it, as this would likely require the franchisee's consent or be subject to legal challenges. Prospective franchisees should carefully consider the implications of this clause, as it could impact their future business decisions and activities, especially after the franchise agreement ends.