If a provision of the Coffee News agreement cannot be modified to be valid, what happens to it?
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 agreement is deemed invalid, the rest of the agreement remains in effect. The invalid portion will be either modified or eliminated, allowing the rest of the contract to be upheld as if the original agreement was signed without the invalid part. This ensures that as much of the original intent of the agreement as possible is preserved and enforced.
This clause is fairly standard in franchise agreements. It protects the overall contract from being voided due to a single unenforceable clause. However, prospective Coffee News franchisees should understand that while the agreement aims to remain intact, the modification or elimination of a provision could potentially alter their rights or obligations under the franchise agreement.
It's important to note that while a court can modify the time period or geographical area of applicability within the agreement, the parties involved do not intend for a court to modify the payment terms. This means that financial obligations are intended to remain fixed, regardless of other potential modifications to the agreement. Franchisees should seek legal counsel to fully understand the implications of this clause and how it might affect their specific circumstances.