What happens if a provision of the Coffee News agreement is deemed invalid?
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 a court deems any provision of the franchise agreement invalid, the remainder of the agreement will remain in effect. The agreement will be interpreted as if it were signed with the invalid portion modified or removed. This ensures that as much of the original agreement as possible is upheld and enforced.
This clause protects Coffee News by ensuring that a single invalid provision does not nullify the entire agreement. It allows for the severance or modification of problematic clauses while preserving the overall contractual relationship between the franchisor and franchisee. This is a fairly standard clause in franchise agreements.
However, the document also states that the parties do not intend for a court to modify the payment terms outlined in the agreement. This means that while other provisions can be adjusted or removed, the financial obligations of the franchisee are intended to remain fixed and enforceable. Prospective franchisees should carefully review all payment terms and ensure they are fully understood and acceptable, as these are unlikely to be altered by a court.
Additionally, the agreement addresses the enforceability of restrictive covenants, stating that if any portion of these covenants is held to be unreasonable, arbitrary, or against public policy, it shall be considered divisible as to time and region. A court may enforce a lesser time period or geographical area if the original terms are deemed unreasonable. This provides some flexibility in the enforcement of non-compete or other restrictive clauses, ensuring they are fair and reasonable under the specific circumstances.