What happens after Closet Storage Concepts reduces the scope of any covenants of the franchisee?
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's 2025 Franchise Disclosure Document, the franchisee must immediately comply with any covenant that has been modified. Closet Storage Concepts has the right to reduce the scope of any covenant in the agreement without the franchisee's consent. This change becomes effective as soon as the franchisee receives written notice.
This clause gives Closet Storage Concepts significant flexibility to adjust the terms of the franchise agreement, particularly regarding post-term non-compete obligations. For a prospective franchisee, this means the restrictions on their activities after the franchise agreement ends could change at any time during the term.
It is important for a potential Closet Storage Concepts franchisee to fully understand the implications of this clause and to consider how it might affect their future plans if they decide to leave the franchise system. They should seek clarification from Closet Storage Concepts regarding the types of covenants that might be modified and the potential reasons for such modifications.