Can Dermani Medspa reduce the scope of the non-compete covenant without the franchisee's consent?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
I agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement. If all or any portion of a covenant in this Agreement is held unreasonable or unenforceable by a court or agency having valid jurisdiction in an unappealed final decision to which the Company is a party, I expressly 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 Agreement.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa FDD, if a court finds any portion of the non-compete agreement unreasonable or unenforceable, the franchisee agrees to be bound by a lesser covenant that imposes the maximum duty permitted by law. This means that Dermani Medspa can enforce a narrower version of the non-compete agreement if the original is deemed too broad, without needing the franchisee's explicit consent at that time. The franchisee's initial agreement to the franchise terms covers this possibility. This ensures that some form of non-compete obligation remains in place, to the maximum extent legally allowed.
This clause is designed to protect Dermani Medspa's interests by ensuring that franchisees do not unfairly compete, even if the original non-compete terms are challenged. It allows for flexibility in enforcing the non-compete agreement, adapting to specific legal interpretations or jurisdictions. However, it also means that a franchisee could be subject to a non-compete obligation that is different from what they initially understood, based on a court's decision.
For a prospective Dermani Medspa franchisee, this highlights the importance of understanding the non-compete agreement and its potential implications. It would be prudent to consult with an attorney to assess the enforceability of the non-compete terms in their specific location and to understand the potential scope of the "lesser covenant" that could be enforced. This clause reflects a common practice in franchising, where franchisors seek to protect their business model and brand reputation through non-compete agreements, while also accounting for variations in state laws and judicial interpretations.