Can a court modify the non-compete restriction in the Desi District agreement if it's deemed unreasonable?

According to Desi District's 2024 Franchise Disclosure Document, the franchise agreement includes a provision that addresses the possibility of a court finding the non-compete covenants to be unenforceable or unreasonable. Specifically, both the Franchise Agreement and the Guaranty Agreement contain clauses that allow for modification of the non-compete restrictions by a court or arbitrator.

This means that if a court or arbitrator determines that the non-compete terms are too broad or unreasonable, the parties intend for the court or arbitrator to modify the restriction to the extent necessary to protect Desi District's legitimate business interests. This modification would aim to make the restriction enforceable while still safeguarding the franchisor's interests.

This clause provides a degree of flexibility and reasonableness to the non-compete agreement. It doesn't automatically invalidate the non-compete if any part is deemed unreasonable. Instead, it allows for a more tailored approach where the restrictions can be adjusted to be fair and enforceable, balancing the interests of both the franchisor and the franchisee or guarantor. Prospective franchisees should understand that while the non-compete is intended to be enforced, there is a mechanism in place to address potential issues of unreasonableness through modification by a court or arbitrator.