Does the Fly To Fit agreement consider each non-compete covenant independent of other provisions?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
ry of any other Fly To Fit business operating on the date of termination or transfer, as applicable. If this Agreement is terminated before the Territory is determined, then the area of noncompetition will the Development Area and the territory of any other Fly To Fit business operating on the date of termination.
- (c) Interpretation. The parties agree that each of the foregoing covenants is independent of any other covenant or provision of this Agreement. If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any arbitrator or court, then the parties intend that the arbitrator or court modify such restriction to the extent reasonably necessary to protect the legitimate business interests of Fly To Fit Franchise. Franchisee agrees that the existence of any claim it may have against Fly To Fit Franchise shall not constitute a defense to the enforcement by Fly To Fit Franchise of the covenants of this Section. If a Restricted Party fails to comply with the obligations under this Section during the restrictive period, then the restrictive period will be extended an additional day for each day of noncompliance.
- 13.3 General Manager and Key Employees. If requested by Fly To Fit Franchise, Franchisee will cause its general manager and other key employees to sign Fly To Fit Franchise's then-current form of confidentiality and non-compete agreement (unless prohibited by applicable law).
ARTICLE 14. DEFAULT AND TERMINATION
14.1 Termination by Franchisee. Franchisee may terminate this Agreement only if Fly To Fit Franchise violates a material provision of this Agreement and fails to cure or to make substantial
progress toward curing the violation within 30 days after receiving written notice from Franchisee detailing the alleged default.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the franchise agreement specifies that each covenant within the non-compete agreement is considered independent of any other covenant or provision within the agreement. This applies both to the franchisee and to any guarantor who signs a separate Guaranty and Non-Compete Agreement. This means that if one part of the non-compete is found to be unenforceable, the rest of the agreement can still be valid and enforced.
For a prospective Fly To Fit franchisee, this is important because it means that even if they have a claim against Fly To Fit, they cannot use that as a defense against the enforcement of the non-compete agreement. Similarly, if a portion of the non-compete agreement is deemed unenforceable, the remaining parts of the agreement will still be in effect. This could limit the franchisee's ability to work in a competing business after the franchise agreement expires or is terminated.
The FDD also states that if any part of the non-compete agreement is held to be unenforceable, the arbitrator or court is intended to modify the restriction to protect Fly To Fit's legitimate business interests. Furthermore, if the franchisee or guarantor fails to comply with the non-compete obligations, the restrictive period will be extended by one day for each day of noncompliance.
This type of clause is fairly common in franchise agreements, as franchisors want to protect their business interests and prevent franchisees from using their knowledge gained during the franchise term to compete against the system after they leave. Prospective franchisees should carefully review the non-compete provisions and understand the implications before signing the agreement.