Does the Coffee News agreement specify that the parties agree that the restrictive covenants are reasonable with respect to their subject matter, duration, and geographical application?

According to the 2025 Coffee News Franchise Disclosure Document, the franchise agreement stipulates that both parties acknowledge and agree that the restrictive covenants within the agreement are considered reasonable in terms of their subject matter, duration, and geographical scope. This indicates that franchisees, upon entering the agreement, concur with the limitations placed on their activities post-termination or during the franchise term, agreeing that these restrictions are fair and justified. This agreement aims to protect Coffee News's business interests while setting clear expectations for franchisees regarding competitive activities.

However, the Coffee News agreement also addresses the possibility that a court might find a portion of the restrictive covenants to be unreasonable, arbitrary, or against public policy. In such cases, the agreement specifies that the problematic section should be considered divisible, particularly concerning time and region. This means that if a specific time period or geographical area of the covenant is deemed unreasonable, a lesser time period or smaller geographical area may be enforced instead, provided it is considered reasonable, non-arbitrary, and not against public policy.

This provision offers a degree of flexibility, allowing courts to modify the restrictive covenants to make them enforceable while still protecting Coffee News's legitimate business interests. It is important to note that while the agreement allows for modifications to the time period or geographical area of applicability, it explicitly states that the parties do not intend for a court to modify the payment terms outlined in the agreement. This ensures that the financial obligations of the franchisee remain unchanged, regardless of any adjustments made to the restrictive covenants.