Does City Publications consider the restrictive covenants in Section 17 essential to the franchise agreement?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that the restrictive covenants contained in Section 17 are essential elements of this Agreement
and that without their inclusion, Franchisor would not have entered into this Agreement. Franchisee agrees that each of the terms set forth herein, including the restrictive covenants, is fair and reasonable, and are reasonably required for the protection of Franchisor and the Franchise System.
As any breach by Franchisee of any of the covenants contained in this Section would result in irreparable injury to Franchisor, and as the damages arising out of any such breach would be difficult to ascertain, Franchisee agrees that, in addition to all other remedies provided by law or in equity, Franchisor, in the event of a breach or threatened breach of the covenants herein contained, shall be entitled to seek immediate equitable remedies including, but not limited to, restraining orders, preliminary and permanent injunctions in order to prevent Franchisee, its partners, members, officers, directors or employees from continuing to breach the covenants contained in this Section 17.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the restrictive covenants outlined in Section 17 of the franchise agreement are considered essential. City Publications states that it would not enter into the franchise agreement without these covenants.
These restrictive covenants include limitations on a franchisee's ability to engage in competitive business activities, solicit employees, or solicit customers, both during the term of the agreement and for a specified period after termination. Specifically, franchisees acknowledge that these restrictions are fair, reasonable, and necessary to protect City Publications and the franchise system.
City Publications emphasizes the importance of these covenants by stating that any breach by a franchisee would result in irreparable injury to the company. Because damages would be difficult to calculate, City Publications is entitled to seek immediate equitable remedies, including restraining orders and injunctions, to prevent any ongoing or threatened breach of these covenants. This highlights the seriousness with which City Publications views these restrictions and their enforcement.