Can a court reduce the scope of a promise or covenant in the City Publications agreement?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
ning termination or nonrenewal of the Franchise Agreement, which may supersede provisions in the Franchise Agreement, specifically Sections 5.B and 19.
- Sections 5B.10 and 20B.2 of the Franchise Agreement require Franchisee to sign a general release as a condition of renewal and transfer of the franchise; such release shall exclude claims arising under California Franchise Investment Law and California Franchise Relations Act.
- Section 17A of the Franchise Agreement contains a covenant not to compete which extends beyond the expiration or termination of the Franchise Agreement; this covenant may not be enforceable under California law.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to the 2025 City Publications Franchise Disclosure Document, Section 17A of the Franchise Agreement contains a covenant not to compete which extends beyond the expiration or termination of the Franchise Agreement. However, this covenant may not be enforceable under California law. This suggests that a court could potentially reduce the scope or enforceability of the non-compete agreement, particularly in California.
Additionally, the Washington Addendum to the Franchise Agreement states that there may be court decisions that may supersede the franchise agreement in the franchisee's relationship with the franchisor, including the areas of termination and renewal of the franchise. Furthermore, provisions that unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
These clauses indicate that certain provisions within the City Publications franchise agreement, particularly those concerning non-compete obligations, termination, and renewal, may be subject to legal challenges and potential modifications by a court, depending on the applicable state laws and specific circumstances. Prospective franchisees should consult with legal counsel to understand the full implications of these provisions and their enforceability in their specific jurisdiction.