If a court finds the non-compete period for Fly Fitness unreasonable, how will the period be adjusted?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
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 19 or any portion thereof, without Franchisee's consent, effective immediately upon receipt by Franchisee of written notice thereof, and Franchisee agrees to forthwith comply with any covenant as so modified.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, if a court determines that the non-compete restrictions are unreasonable, the time period or geographic scope will be reduced. This means the court will adjust the restrictions, either by shortening the duration of the non-compete or by narrowing the geographic area where the franchisee is prohibited from competing, or both. The adjustment will be made to the extent necessary for the restrictions to be considered reasonable and enforceable.
Fly Fitness also retains the right to modify the non-compete agreement. The franchisor can, at its discretion, reduce the scope of any covenant within the agreement without needing the franchisee's consent. This modification becomes effective immediately once the franchisee receives written notice. The franchisee is then obligated to comply with the modified covenant.
This clause provides Fly Fitness with some flexibility to ensure the non-compete agreement is enforceable and protects its interests. It also means that a franchisee's non-compete obligations could change during the term of the franchise agreement if Fly Fitness deems it necessary. Franchisees should be aware of this possibility and understand that their ability to compete after leaving the Fly Fitness system could be affected by these adjustments.