If a provision in the Crawlspace Medic franchise agreement is declared invalid, what is the extent of the invalidity?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
c. The parties acknowledge and agree that each of the covenants contained herein are reasonable limitations as to time, geographical area, and scope of activity to be restrained and do not impose a greater restraint than is necessary to protect the goodwill or other business interests of Franchisor.
d. If the period of time or the geographic scope specified Section 2.b. above, should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable.
In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement or any portion thereof, without Covenantor's or Franchisee's consent, effective immediately upon receipt
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to the 2024 Crawlspace Medic FDD, if any part of the non-compete agreement is deemed unreasonable, the restrictions will be reduced to what is considered reasonable. This could involve shortening the time period or reducing the geographic scope of the restriction. Crawlspace Medic also retains the right to modify the scope of any covenant within the agreement without the franchisee's consent by providing written notice.
This means that a franchisee's non-compete obligations could be adjusted if a court finds them too broad or restrictive. The adjustment would aim to make the restrictions enforceable while still protecting Crawlspace Medic's interests. The franchisee must comply with any such modifications made by Crawlspace Medic upon receiving written notice.
This clause provides Crawlspace Medic with flexibility in enforcing non-compete agreements, allowing them to adapt the restrictions to specific situations and legal requirements. It also means that a franchisee's non-compete obligations are not necessarily fixed and could change during the term of the agreement. Franchisees should be aware that Crawlspace Medic can unilaterally reduce the scope of the non-compete, and they must comply with any such changes.