In the Cream franchise agreement, what happens if a covenant restricting competitive activity is deemed unenforceable?

According to Cream's 2025 Franchise Disclosure Document, if a covenant restricting competitive activity is deemed unenforceable due to its scope (area, business activity prohibited, or length of time), but would be enforceable if modified, Cream and the franchisee agree that the covenant will be enforced to the fullest extent permissible under the laws and public policies of the relevant jurisdiction. This means that the franchise agreement will be interpreted to allow for as much restriction on competition as legally possible, even if the original terms are deemed too broad.

This provision protects Cream by ensuring that the restrictive covenants are upheld as much as possible, preventing a franchisee from circumventing the non-compete agreement on technicalities. It also provides a degree of certainty for both parties, as it outlines how the agreement will be interpreted if a specific clause is challenged.

For a prospective Cream franchisee, this means that the non-compete obligations should be taken very seriously. Even if a particular aspect seems overly broad, it will likely be modified and enforced to the maximum extent allowed by law. Franchisees should seek legal counsel to fully understand the implications of these covenants and how they might affect their future business activities after the franchise agreement ends.