Does the Coffee News agreement state that the parties understand and agree to the enforceability of the agreement?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
- The parties to this Agreement understand and agree Enforceability. 16.7 that, if any portion of the restrictive covenants set forth in this Agreement is held to be unreasonable, arbitrary, or against public policy, then that portion of those covenants shall be considered divisible as to time and region.
The parties to this Agreement agree that if any court or competent jurisdiction determines that the specified time period or the specified region of application of any covenant is unreasonable, arbitrary, or against public policy, then a lesser time period, geographical area or both, that is determined to be reasonable, non-arbitrary, and not against public policy, may be enforced against the parties hereto.
The parties to this Agreement agree and acknowledge that they are familiar with the present and proposed operations of "Coffee News" Franchises and believe that the restrictive covenants in this Agreement are reasonable with respect to their subject matter, duration, and geographical application.
Notwithstanding that the parties agree that any court of competent jurisdiction may modify the time period or specify geographical area of applicability in this agreement, the parties do not intend that a court be able to modify the payment terms set forth herein.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, the agreement includes a clause addressing the enforceability of its provisions. Specifically, the parties acknowledge and agree that the restrictive covenants within the agreement are reasonable. This indicates that both Coffee News and the franchisee are entering the agreement with an understanding that its terms are meant to be upheld.
However, the agreement also anticipates the possibility that some provisions might be deemed unreasonable or against public policy. In such cases, the agreement stipulates that the problematic portion should be considered divisible, particularly concerning time and region. This means that if a court finds a specific time period or geographical area of application to be unreasonable, it can modify those aspects to make them enforceable, while still respecting the overall intent of the agreement.
Notably, while the agreement allows for judicial modification of time periods or geographical areas, it explicitly states that the parties do not intend for courts to modify the payment terms. This demonstrates a clear intention to maintain the financial obligations outlined in the agreement, even if other parts are subject to adjustment. This enforceability clause provides a framework for resolving potential disputes while upholding the core principles of the Coffee News franchise agreement.