Can Cinch I.T. unilaterally reduce the duration of any covenant in 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.
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.
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 reduce the scope of any covenant set forth in Sections 11.1 and 11.2 of the agreement. This modification can be made without the franchisee's consent and becomes effective immediately upon the franchisee receiving written notice. The franchisee is obligated to comply with the covenant as modified, and the modified covenant is fully enforceable.
This clause gives Cinch I.T. significant control over the terms of the agreement during its duration. For a potential franchisee, this means that the restrictions and obligations they initially agree to can be altered by Cinch I.T. at any time, potentially impacting their business operations and profitability. It is important to understand the specific covenants outlined in Sections 11.1 and 11.2 to fully grasp the extent of this modification right.
This type of unilateral modification clause is not uncommon in franchising, but franchisees should carefully evaluate the potential impact. It is crucial for prospective franchisees to seek legal counsel to fully understand the implications of this clause and to negotiate for more balanced terms if possible. Understanding the circumstances under which Cinch I.T. might exercise this right is also essential for informed decision-making.
The franchisee also agrees that any claims they may have against Cinch I.T. do not constitute a defense against the enforcement of these covenants. This further strengthens Cinch I.T.'s position, as the franchisee cannot withhold compliance with the covenants even if they have grievances against the franchisor. This could create a challenging situation for franchisees who feel Cinch I.T. is not fulfilling its obligations under the agreement.