What happens if a Fly To Fit franchisee violates the non-compete clause?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
(vi) Franchisee or any Owner commits a material violation of Section 7.2 (compliance with laws) or Section 13.1 (confidentiality), violates Section 13.2 (non-compete) or Article 15 (transfer), or commits any other violation of this Agreement which by its nature cannot be cured;
(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.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to the 2024 Fly To Fit Franchise Disclosure Document, violating the non-compete agreement can lead to termination of the franchise agreement without an opportunity to cure the breach. Specifically, if a franchisee violates Section 13.2, which outlines the non-compete obligations, Fly To Fit has grounds to terminate the agreement immediately. This means Fly To Fit does not have to provide a 30-day notice or allow the franchisee to correct the violation before ending the agreement.
Additionally, the FDD states that 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. This means that the franchisee's non-compete obligations could be extended beyond the initial two-year period after the agreement expires or is terminated, depending on the length of the violation.
Fly To Fit also has the right to seek legal enforcement of the non-compete agreement. The franchisee agrees that any claims they may have against Fly To Fit will not be a valid defense against Fly To Fit's enforcement of the non-compete covenants. This underscores the importance of adhering to the non-compete terms, as Fly To Fit is prepared to take swift action to protect its business interests and brand integrity.