If a covenant restricting competitive activity in the Cool Binz franchise agreement is deemed unenforceable due to its scope, how will it be enforced?

According to the 2025 Cool Binz Franchise Disclosure Document, if any covenant restricting competitive activity is deemed unenforceable due to its scope regarding area, prohibited business activity, or length of time, Cool Binz and the franchisee agree that the covenant will be enforced to the fullest extent permissible under the laws and public policies applied in the jurisdiction whose law is applicable to the validity of the covenant. This means that if a court finds the original restriction too broad, it will modify the covenant to make it enforceable to the greatest degree allowed by law.

This clause ensures that Cool Binz can still protect its business interests even if the original non-compete agreement is found to be overly restrictive. It provides a mechanism for the court to revise the agreement rather than invalidate it entirely. This could involve reducing the geographic area, limiting the types of prohibited activities, or shortening the duration of the restriction.

For a prospective franchisee, this means that while the initial non-compete terms might seem extensive, they are subject to judicial review and potential modification. The franchisee should be aware that some form of non-compete obligation will likely be enforced, tailored to what is deemed reasonable and lawful by the relevant jurisdiction. It is important to understand the specific laws and public policies regarding non-compete agreements in the state or region where the franchise will operate, as these will dictate the ultimate enforceability of the covenant.