What happens if any of the non-compete covenants in the Dryject franchise agreement are deemed too broad?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) It is the express intention of the parties to this Agreement to comply with all laws applicable to the covenants contained in this Agreement.
If any of the covenants contained in this Section are found to exceed in duration, geography or scope those permitted by applicable law, the parties expressly agree that such restrictive covenant may be reformed or modified by the final judgment of a court of competent jurisdiction or other lawful constituted authority to reflect a lawful and enforceable restriction, whether in duration, geography or scope, and that the covenants contained in this Section shall automatically be deemed to be amended and modified so as to comply with the judgment or order of such court or authority to the maximum extent permitted.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, the franchise agreement includes a provision addressing the possibility that non-compete covenants might be deemed overly broad under applicable law. Specifically, the agreement states that if a court or other legal authority finds any of the non-compete restrictions to be excessive in duration, geography, or scope, the parties agree that the covenant can be reformed or modified.
This reformation or modification would be implemented through a final judgment by a court with jurisdiction or another lawfully constituted authority. The goal is to adjust the restriction to a lawful and enforceable level, whether by altering its duration, geographical reach, or scope. The agreement specifies that the covenants will automatically be considered amended and modified to comply with the court's judgment or order, ensuring compliance to the maximum extent permitted by law.
For a prospective Dryject franchisee, this clause offers some protection against overly broad non-compete restrictions. It suggests that if a non-compete provision is challenged and found to be unreasonable, it will be adjusted to a legally acceptable level rather than being entirely invalidated. This provides a degree of certainty that some form of non-compete obligation will likely remain in effect, but it should also be reasonable and enforceable under the relevant laws. Franchisees should seek legal counsel to fully understand the implications of non-compete clauses in their specific jurisdiction.