Who is protected by the restrictive covenants signed by the franchisee's personnel for a City Publications franchise?
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 are designed to protect both the Franchisor and the Franchise System. The document states that the franchisor would not have entered into the agreement without these covenants. These covenants are deemed fair and reasonably required for the protection of City Publications and its franchise system.
Specifically, the restrictive covenants prevent the franchisee and their personnel from engaging in activities that could harm City Publications' business interests. This includes owning or working for a competing business, soliciting City Publications' customers, or hiring employees from City Publications or its other franchisees. These restrictions apply both during the term of the franchise agreement and for a period of time after the agreement expires or is terminated.
If a franchisee breaches these covenants, City Publications is entitled to seek legal remedies, including immediate equitable relief such as restraining orders and injunctions, to prevent further breaches. This highlights the importance City Publications places on these restrictions to maintain the integrity of its franchise system and protect its business interests. The franchisee acknowledges that any breach would result in irreparable injury to City Publications, and damages would be difficult to ascertain, further justifying the franchisor's right to seek injunctive relief.