How will Extreme Art Studio notify owners of a reduction in the scope of a non-competition covenant?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- d. You and we both believe that the covenants in this Agreement are reasonable in terms of scope, duration, and geographic area. However, we may at any time unilaterally modify the terms of this Agreement upon written notice to you by limiting the scope of the Prohibited Activities, narrowing the definition of a Competitive Business, shortening the duration of the Restricted Period, reducing the geographic scope of the Restricted Territory, and/or reducing the scope of any other covenant imposed upon you under this Agreement to ensure that the terms and covenants in this Agreement are enforceable under applicable law.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio FDD, Extreme Art Studio may modify the terms of the Franchise Agreement, including the non-compete covenants, by providing written notice to the franchisee. These modifications can include limiting the scope of prohibited activities, narrowing the definition of a competitive business, shortening the restricted period, or reducing the geographic scope of the restricted territory.
This means that Extreme Art Studio retains the right to adjust the non-compete agreement to ensure its enforceability under applicable law. If the initial terms are deemed too broad or restrictive by a court, Extreme Art Studio can unilaterally modify the agreement to make it reasonable.
For a prospective franchisee, this clause offers some protection against overly broad non-compete restrictions. However, it also means that Extreme Art Studio has the power to change the terms of the agreement, potentially impacting the franchisee's future business activities after the franchise relationship ends. Franchisees should be aware of this flexibility and consider its implications for their long-term plans.