What is the franchisee's obligation if Closet Storage Concepts reduces the scope of any covenants?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
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- I understand and acknowledge that the Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement, or any portion thereof, without my consent, effective immediately upon receipt by me of written notice thereof; and I agree to comply forthwith with any covenant as so modified.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, the franchisee must comply immediately if Closet Storage Concepts reduces the scope of any covenant in the agreement. Specifically, Closet Storage Concepts has the right to reduce the scope of any covenant without the franchisee's consent.
Upon receiving written notice of the change, the franchisee must comply with the covenant as modified. This gives Closet Storage Concepts considerable flexibility to adjust the restrictions placed on the franchisee during the term of the agreement.
This clause is significant for prospective franchisees as it means that the covenants, such as non-compete agreements, can be altered by Closet Storage Concepts at any time. While a reduction in scope might seem beneficial, it's essential to understand how such changes could impact the franchisee's business operations and competitive landscape. Franchisees should seek clarification on what circumstances might lead to a reduction in scope and how Closet Storage Concepts would ensure fair implementation of such changes.