If any non-competition or non-solicitation covenant in the Degree Wellness agreement is deemed unenforceable, what will happen to the provision?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- a. To the extent that any of the non-competition, non-solicitation, or other restrictive covenants of this Agreement are deemed unenforceable because of their scope in terms of area, business activity prohibited, length of time, or other terms, you agree that the invalid provision will be deemed modified or limited to the extent or manner necessary to make that particular provision valid and enforceable to the greatest extent possible in light of the intent of the parties expressed in such provision under the laws applied in the forum in that we are seeking to enforce such provision.
- b. If any lawful requirement or court order of any jurisdiction (1) requires a greater advance notice of the termination or non-renewal of this Agreement than is required under this Agreement, or the taking of some other action which is not required by this Agreement, or (2) makes any provision of this Agreement or any specification, program, standard, or operating procedure we prescribed invalid or unenforceable, then the advance notice and/or other action required or revision of the specification,
program, standard, or operating procedure will be substituted for the comparable provisions of this Agreement in order to make the modified provisions enforceable to the greatest extent possible. You agree to be bound by the modification to the greatest extent lawfully permitted.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, if any non-competition or non-solicitation covenant is deemed unenforceable due to its scope, area, prohibited business activity, or length of time, the provision will be modified or limited. This modification will occur to the extent necessary to make the provision valid and enforceable, aligning with the parties' intent as expressed in the provision and under the applicable laws of the enforcement forum. This ensures that Degree Wellness can still protect its interests to the greatest extent possible under the law.
This clause is important for prospective Degree Wellness franchisees because it means that even if a specific part of the non-compete or non-solicitation agreement is found to be too broad or restrictive, the entire provision will not necessarily be thrown out. Instead, the clause will be adjusted to be legally sound while still providing some protection for Degree Wellness. This could impact a franchisee's future business activities if they were to leave the Degree Wellness system, as the modified clause would still restrict certain actions.
Furthermore, if any lawful requirement or court order necessitates a greater advance notice of termination or non-renewal than what is stipulated in the agreement, or if any provision of the agreement is deemed invalid, the required action or revision will be substituted for the comparable provisions. The franchisee agrees to be bound by these modifications to the greatest extent lawfully permitted. This ensures that the Degree Wellness franchise agreement remains compliant with local laws and regulations, which may vary by jurisdiction.
In Washington state, noncompetition covenants are void and unenforceable against an employee, including an employee of a franchisee, unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year (an amount that will be adjusted annually for inflation). Also, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year (an amount that will be adjusted annually for inflation).