Does the Fly Fitness agreement state that the non-compete covenants are considered fair and reasonable?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.4 Reasonableness of Restrictions.
Developer acknowledges and agrees that the covenants not to compete set forth in this Agreement are fair and reasonable and will not impose any undue hardship on Developer since Developer has other considerable skills, experience and education which afford Developer the opportunity to derive income from other endeavors.
- 8.5 Reduction of Time or Scope.
If the period of time or the geographic scope specified above, should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable.
In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Article 8 or any portion thereof, without Developer's consent, effective immediately upon receipt by Developer of written notice thereof, and Developer agrees to forthwith comply with any covenant as so modified.
- 8.6 Injunctive Relief.
Developer acknowledges that a violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to Franchisor for which no adequate remedy at law will be available.
Accordingly, Developer hereby consents to the entry of an injunction prohibiting any conduct by Developer in violation of the terms of the covenants not to compete set forth in this Agreement.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the franchise agreement includes an acknowledgement by the franchisee (referred to as "Developer") that the non-compete covenants are considered fair and reasonable. The agreement states that these covenants will not impose undue hardship on the franchisee because the franchisee has other skills, experience, and education that allow them to earn income from other sources. This acknowledgement is part of the broader non-competition covenants outlined in the agreement.
This clause is significant because it indicates that Fly Fitness believes the non-compete terms are necessary to protect its business interests, and the franchisee agrees with this assessment. By acknowledging the reasonableness of the restrictions, a franchisee may face a higher legal hurdle if they later attempt to challenge the enforceability of the non-compete agreement.
The Fly Fitness agreement also includes a provision that allows for the reduction of the non-compete's time period or geographic scope if a court finds them to be unreasonable. This provision aims to ensure that the non-compete is enforceable to the maximum extent permissible by law. Furthermore, the agreement states that violating the non-compete covenants would cause immediate and irreparable harm to Fly Fitness, entitling Fly Fitness to injunctive relief, which is a court order preventing the franchisee from engaging in the prohibited conduct.
It is important for prospective Fly Fitness franchisees to carefully consider these non-compete terms and understand their implications before signing the franchise agreement. Franchisees should seek legal advice to fully understand the scope and enforceability of these covenants in their specific jurisdiction.