Can Cinch I.T. reduce the scope of any covenant in Sections 11.1 and 11.2 of the agreement?
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 the 2024 Cinch I.T. Franchise Disclosure Document, Cinch I.T. has the right to modify the scope of covenants outlined in Sections 11.1 and 11.2 of the franchise agreement. This means that Cinch I.T., at its discretion, can reduce the restrictions or obligations initially placed on the franchisee by these covenants.
This modification can be made without the franchisee's consent and becomes effective immediately once the franchisee receives written notice. The franchisee is then obligated to comply with the modified covenant. This clause gives Cinch I.T. significant flexibility to adjust the franchisee's obligations, potentially in response to changing market conditions or other strategic considerations.
For a prospective franchisee, this implies a degree of uncertainty regarding the long-term enforceability of the original agreement terms. While the franchisor can only reduce the scope of the covenants, it is essential to understand the potential implications of such changes and how they might affect the franchisee's business operations and competitive landscape. It would be prudent for a potential franchisee to seek legal counsel to fully understand the scope of these covenants and the potential impact of their modification.