What is the franchisee's agreement regarding the fairness and reasonableness of the terms, including restrictive covenants, within the City Publications 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.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the franchisee acknowledges the importance and reasonableness of the restrictive covenants in Section 17 of the franchise agreement. The franchisee specifically agrees that all terms, including these restrictive covenants, are fair, reasonable, and necessary to protect City Publications and its franchise system. This acknowledgement is a crucial element of the agreement, without which City Publications would not enter into the franchise agreement.
These restrictive covenants include limitations on the franchisee's activities during the term of the agreement and for a period of two years after termination or expiration. During the agreement, the franchisee is restricted from owning, managing, or being involved with any Competitive Business. After the agreement ends, the franchisee is restricted for two years from engaging in similar competitive activities within a specified territory.
City Publications emphasizes that any breach of these covenants by the franchisee would cause irreparable harm, making it difficult to determine the exact monetary damages. Therefore, City Publications is entitled to seek immediate equitable remedies, such as restraining orders and injunctions, to prevent any ongoing or potential breaches of these covenants. This highlights the serious nature of these restrictions and the legal recourse available to City Publications to enforce them.
The agreement also includes a severability clause, indicating that if any part of Section 17 is deemed unenforceable, the remaining provisions will still remain in effect. This ensures that the core protections for City Publications remain intact even if specific clauses are challenged. Prospective franchisees should carefully consider these restrictions and their potential impact on future business activities before entering into a franchise agreement with City Publications.