What is the impact of the severability clause on 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.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, the severability clause ensures that even if a portion of the franchise agreement is deemed invalid or unenforceable, the remaining provisions will still remain in effect. Specifically, if any part of the agreement is found to be invalid, it will be either modified or eliminated, allowing the rest of the agreement to continue as if the invalid portion was never there. This protects the overall integrity and enforceability of the contract.
This clause is particularly relevant to the restrictive covenants within the Coffee News agreement. If any of these covenants are considered unreasonable, arbitrary, or against public policy, the severability clause allows for that specific portion to be treated as divisible in terms of time and region. This means that a court could narrow the scope of the covenant to make it enforceable, rather than striking down the entire agreement.
For a prospective Coffee News franchisee, the severability clause offers a degree of assurance that the entire franchise agreement will not be invalidated due to a single problematic provision. It allows for adjustments to be made to specific parts of the agreement, particularly the restrictive covenants, ensuring that the core obligations and rights remain intact. This is a fairly standard clause in franchise agreements, designed to balance the interests of both the franchisor and the franchisee by maintaining the agreement's overall validity.