What is the required action regarding restrictive covenants in the Fly To Fit Franchise Agreement?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
This Rider amends the Franchise and Multi-Unit Development Agreement dated (the "Agreement"), between Fly To Fit Franchise, LLC, a Delaware Limited Liability Company ("Fly To Fit Franchise") and, a ("Franchisee").
- 1. Definitions. Capitalized terms used but not defined in this Rider have the meanings given in the Agreement.
- 2. Amendments. The Agreement (and any Guaranty Agreement) is amended to comply with the following:
- (1) Restrictive Covenants: Every contract by which Franchisee, any Guarantor, or any other person is restrained from exercising a lawful profession, trade, or business of any kind is subject to NDCC Section 9-08-06.
Source: Item 23 — RECEIPTS (FDD pages 44–134)
What This Means (2024 FDD)
According to the 2024 Fly To Fit Franchise Disclosure Document, the action required regarding restrictive covenants varies by state. For instance, in North Dakota, every contract that restrains a franchisee, any guarantor, or any other person from practicing a lawful profession, trade, or business is subject to North Dakota Century Code Section 9-08-06. This means that the standard restrictive covenants in the Fly To Fit Franchise Agreement are subject to state law and may be limited or unenforceable.
In California, the Franchise Agreement contains a covenant not to compete that extends beyond the termination of the franchise, but this provision may not be enforceable under California law. This suggests that Fly To Fit franchisees in California might not be bound by the non-compete clause after their franchise agreement ends, offering them more freedom to engage in similar businesses post-franchise.
These stipulations highlight the importance of franchisees understanding the specific legal riders and addenda applicable to their state. The enforceability and interpretation of restrictive covenants can significantly impact a franchisee's rights and obligations, especially concerning their ability to operate or invest in similar businesses after the franchise term. Prospective Fly To Fit franchisees should consult with legal counsel to fully understand the implications of these covenants in their specific jurisdiction.