What is the effect of the construction of language provision in the Coffee News agreement?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
remainder of the Agreement shall continue in full force or effect as if the Agreement had been signed with the invalid portion so modified or eliminated.
16.6 Exhibits and Schedules. All exhibits and schedules attached hereto are incorporated by reference in the appropriate paragraph and form a part of the Agreement.
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, if any part of the restrictive covenants within the agreement is deemed unreasonable, arbitrary, or against public policy, that specific part will be considered divisible in terms of time and region. This means that the rest of the agreement remains valid even if a portion is found to be unenforceable.
Furthermore, the Coffee News agreement states that if a court determines that the specified time period or geographical area of any covenant is unreasonable, arbitrary, or against public policy, a lesser time period or geographical area may be enforced. This allows a court to modify the restrictive covenants to make them reasonable and enforceable while still protecting Coffee News's interests.
However, the agreement explicitly states that while a court can modify the time period or geographical area of applicability, 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, even if other parts of the agreement are adjusted by a court. This provision aims to balance the enforceability of the agreement with the need to maintain fair and reasonable terms for both Coffee News and the franchisee.