Is the non-competition covenant in the Fly Fitness agreement subject to any exceptions?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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.
- 10.4.4 enforcement of Developer's post-termination obligations, including but not limited to, Developer's non-competition covenants.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the non-competition covenants are subject to certain limitations. Specifically, if a court finds the time period or geographic scope of the non-compete to be unreasonable, the agreement states that the restrictions will be reduced to a reasonable level. This means a court could reduce the number of months or the geographic area covered by the non-compete if it's deemed too broad.
Fly Fitness acknowledges that the non-compete covenants are fair and reasonable, and will not impose undue hardship on the developer, as the developer has other skills, experience, and education to derive income from other endeavors. This statement suggests Fly Fitness believes the non-compete terms are necessary to protect their business interests, but also recognizes the franchisee's need to earn a living.
Furthermore, the FDD states that Fly Fitness can seek enforcement of the non-competition covenants in court, as disputes regarding the enforcement of these covenants are excluded from mandatory mediation or arbitration. This allows Fly Fitness to directly pursue legal action to prevent a former franchisee from violating the non-compete agreement.