Does the Crown Gold Exchange agreement specify that each non-compete covenant is independent?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
- (c) Interpretation. The parties agree that each of the foregoing covenants is independent of any other covenant or provision of this Agreement. If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any arbitrator or court, then the parties intend that the arbitrator or court modify such restriction to the extent reasonably necessary to protect the legitimate business interests of Crown Gold Franchising. Franchisee agrees that the existence of any claim it may have against Crown Gold Franchising shall not constitute a defense to the enforcement by Crown Gold Franchising of the covenants of this Section. If a Restricted Party fails to comply with the obligations under this Section during the restrictive period, then the restrictive period will be extended an additional day for each day of noncompliance.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Crown Gold Exchange Franchise Disclosure Document, the franchise agreement specifies that each non-compete covenant is independent of any other covenant or provision within the agreement. This means that if one part of the non-compete agreement is found to be unenforceable, the rest of the non-compete agreement should still remain in effect.
Specifically, the FDD states that if any portion of the non-compete covenants is deemed unenforceable or unreasonable by an arbitrator or court, the intention is for the arbitrator or court to modify the restriction only to the extent necessary to protect the legitimate business interests of Crown Gold Franchising. This suggests that Crown Gold Exchange aims to maintain the broadest possible protection for its business interests while adhering to legal standards.
Furthermore, the agreement clarifies that any claims the franchisee may have against Crown Gold Franchising do not serve as a valid defense against the enforcement of the non-compete covenants by Crown Gold Franchising. Additionally, if a restricted party fails to comply with the obligations under the non-compete agreement during the restrictive period, the period will be extended by one day for each day of noncompliance, reinforcing the importance of adhering to the terms of the non-compete agreement.
This clause is fairly common in franchise agreements, as it protects the franchisor from a franchisee claiming that the entire non-compete is invalid due to one specific clause being unenforceable. Prospective franchisees should understand the implications of each clause and how they function independently.