Does the Craters & Freighters franchise agreement allow for the covenants in Section 15 to be considered independently?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- 25.2 Severability. Each section, paragraph, term, and condition of this Agreement will be considered severable and if, for any reason, any such paragraph, term, and/or condition of this Agreement is determined to be invalid, contrary to, or in conflict with any applicable present or future law or regulation, such determination will not impair the operation of, or have any other effect upon, the remaining portions of this Agreement, which will continue to be given full force and effect and bind the parties hereto, although any section, paragraph, term, or condition determined to be invalid will be deemed not part of this Agreement. Franchisee will be bound by any promise or covenant imposing the maximum duty permitted by law which is contained within the terms of any provision hereof, as though it were separately stated in and made a part of this Agreement, that may
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, Section 25.2 addresses the severability of the agreement. It states that each section, paragraph, term, and condition of the agreement will be considered severable. This means that if any part of the agreement is deemed invalid or conflicts with any law or regulation, it will not affect the remaining portions of the agreement. The remaining portions will still be in full effect and bind the parties.
In practical terms, this clause ensures that if a specific clause, such as one within Section 15 regarding restrictive covenants, is found to be unenforceable, the rest of the franchise agreement remains valid. This protects Craters & Freighters from the entire agreement being invalidated due to a problem with a single provision.
For a prospective Craters & Freighters franchisee, this is beneficial because it provides assurance that the entire agreement won't be nullified by a single issue. The franchisee will still be bound by the remaining terms and conditions, and the franchise relationship can continue without major disruption. The franchisee is bound by the maximum duty permitted by law within the terms of any provision, as if it were separately stated in the agreement.