Are the non-competition covenants in the Crepe De Licious Owners Agreement considered independent of other provisions?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.2 Construction of Covenants. The parties agree that each such covenant related to noncompetition will be construed as independent of any other covenant or provision of this Owners Agreement. If all or any portion of a covenant referenced in this Section 3 is held unreasonable or unenforceable by a court or agency having valid jurisdiction in a final decision to which we are a party, Owners agree to be bound by any lesser covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and made a part of this Section 3.
- 3.3 Our Right to Reduce Scope of Covenants. Additionally, we have the right, in our sole discretion, to unilaterally reduce the scope of all or part of any covenant referenced in this Section 3 of this Owners Agreement, without Owners' consent (before or after any dispute arises), effective when we give Owners written notice of this reduction. Owners agree to comply with any covenant as so modified.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious Franchise Disclosure Document, the non-competition covenants within the Owners Agreement are designed to be independent of other provisions. Specifically, each covenant related to noncompetition is construed as separate from any other covenant or provision in the Owners Agreement. This means that if one part of the agreement is found to be unenforceable, the non-compete clauses are still intended to remain in effect.
This independence is reinforced by a clause stating that if any portion of the non-compete agreement is deemed unreasonable or unenforceable by a court, the owners agree to be bound by a lesser covenant that imposes the maximum duty permitted by law. This ensures that Crepe De Licious can enforce the non-compete to the fullest extent possible, even if the original terms are modified by a legal decision.
Additionally, Crepe De Licious retains the right to unilaterally reduce the scope of the non-compete covenants. This allows Crepe De Licious to modify the terms of the agreement, without the owner's consent, to ensure enforceability or to address specific situations. Owners are obligated to comply with any such modifications once they receive written notice. This provides Crepe De Licious with flexibility in enforcing the non-compete agreements while requiring owners to adhere to the adjusted terms.