What is Fitstop's right regarding the scope of restrictive covenants?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.5 Interpretation of Restrictive Covenants. You understand and acknowledge that we shall have the right, in our sole discretion, to reduce the scope of any covenant set forth in this Section without your consent effective immediately upon written notice to you.
You agree that you shall comply with any covenant as so modified, which modified covenant shall be fully enforceable notwithstanding the provisions of any other Sections hereof.
- 18.6 No Defense to Violation of Covenants. You expressly agree that the existence of any claims that you or your employees may have against us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement of us of the covenants in this Section.
You agree to pay all costs and expenses (including reasonable attorneys' fees and all costs of court) incurred by us in connection with the enforcement of this Section of this Agreement.
- ©2024 Fitstop USA, Inc. 18.7 Irreparable Harm and Right to Injucntive Relief and Remedies. You acknowledge that a violation of any of the terms of this Section would result in irreparable injury to us for which no adequate remedy at law may be available.
You acknowledge that the Competitive Information described herein has
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to the 2024 Fitstop Franchise Disclosure Document, Fitstop has the right to unilaterally reduce the scope of any restrictive covenant. This means Fitstop can, at its discretion, lessen the restrictions placed on the franchisee without needing the franchisee's approval.
Fitstop can implement this change immediately by providing written notice to the franchisee, and the franchisee must comply with the modified covenant. This modified covenant is fully enforceable, regardless of any other provisions in the agreement. This clause gives Fitstop significant flexibility to adjust the restrictive covenants as it sees fit, potentially benefiting the franchisee by reducing limitations or, conversely, impacting them if the changes are unfavorable.
Furthermore, the FDD states that any claims the franchisee may have against Fitstop cannot be used as a defense against the enforcement of these covenants. The franchisee is also responsible for covering all costs and expenses, including attorney's fees, that Fitstop incurs while enforcing these covenants. This places a considerable financial burden on the franchisee if they contest Fitstop's enforcement of the restrictive covenants.
Fitstop also emphasizes that violating the restrictive covenants would cause irreparable harm, entitling Fitstop to seek injunctive relief, which could prevent the franchisee from breaching the covenants. This highlights the importance of franchisees understanding and adhering to the restrictive covenants, as Fitstop has multiple avenues for enforcement and the ability to modify the covenants to suit its needs.