Can Cordova unilaterally modify the terms of Article 4 of the Franchise Agreement?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
me unilaterally modify the terms of this Article 4 (Intellectual Property, Brand Protection and Non-Competition Covenants and Restrictions) by limiting the scope of the Prohibited Activities, narrowing the definition of a Competitive Business, shortening the duration of the Restricted Period, reducing the geographic scope of the Restricted Territory and/or reducing the scope of any other covenant imposed upon you under this Article 4 to ensure that the terms are enforceable under applicable law.
(g) Breach. You agree that failure to comply with these Article 4 Intellectual Property, Brand Protection and Non-Competition Covenants and Restrictions will cause irreparable harm to us and/or other Cordova Business franchisees for which there is no adequate remedy at law. Therefore, you agree that any violation of these covenants will entitle us to injunctive relief. You agree that we may apply for such injunctive relief, without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law, and the sole remedy of yours, in the event of the entry of such injunction, will be the dissolution of such injunction, if warranted, upon a hearing duly held (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). If a court requires the filing of a bond notwithstanding the preceding sentence, the parties agree that the amount of the bond shall not exceed $1,000. None of the remedies available to us under this Article are exclusive of any other, but may be combined with others under this Agreement, or at law or in equity, including injunctive relief, specific performance and recovery of monetary damages.
5. Transfer Restrictions and Non-Competition Covenants and Restrictions.
Notwithstanding anything contained in this Agreement to the contrary, you agree that if you are an Owner, and/or the Spouse of an Owner, that, prior to Transferring an Owner's equity and/or ownership interests in F
Source: Item 23 — RECEIPTS (FDD pages 44–195)
What This Means (2025 FDD)
The 2025 Cordova FDD excerpts discuss Article 4 in the context of breach and transfer restrictions, but do not explicitly state whether Cordova can unilaterally modify the terms of Article 4 of the Franchise Agreement. Article 4 concerns intellectual property, brand protection, and non-competition covenants.
The FDD excerpt indicates that failure to comply with Article 4 will cause irreparable harm to Cordova and other franchisees, entitling Cordova to injunctive relief. Additionally, to transfer ownership, franchisees must notify Cordova and obtain written consent to prevent subversion of the non-competition covenants contained in Article 4.
Since the provided FDD excerpts do not address Cordova's ability to unilaterally modify Article 4, it is recommended that prospective franchisees ask Cordova directly about this during their due diligence. Understanding the modification rights related to key clauses like those in Article 4 is crucial for assessing the long-term stability and potential changes to the franchise agreement.