Under what conditions will a covenant restricting competitive activity in the Focalpoint Coaching franchise agreement be enforced to the fullest extent permissible?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
If any covenant which restricts competitive activity is deemed unenforceable by virtue of its scope in terms of area, business activity prohibited, and/or length of time, but would be enforceable if modified, Franchisee and Franchisor agree that the covenant will be enforced to the fullest extent permissible under the laws and public policies applied in the jurisdiction whose law determines the covenant's validity.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, if a covenant restricting competitive activity is deemed unenforceable due to its scope regarding area, prohibited business activity, or length of time, Focalpoint Coaching and the franchisee agree that the covenant will be enforced to the fullest extent permissible under the laws and public policies of the relevant jurisdiction. This means that even if certain aspects of the non-compete agreement are initially deemed too broad or restrictive, the agreement will be interpreted and enforced in a way that provides the maximum protection legally allowed to Focalpoint Coaching.
This clause ensures that Focalpoint Coaching retains as much protection as possible against unfair competition from former franchisees, even if the original terms of the non-compete agreement are found to be overly restrictive. It allows courts or arbitrators to modify the agreement to make it enforceable while still protecting Focalpoint Coaching's interests in its brand, customer relationships, and confidential information.
For a prospective Focalpoint Coaching franchisee, this means that the non-compete agreement is a serious obligation that will be enforced as strictly as the law allows. While some provisions might be modified if deemed unreasonable, the franchisee should expect to be bound by the non-compete to the greatest extent legally possible. This could impact their ability to engage in similar business activities after the franchise agreement expires or is terminated, so it's crucial to understand the specific restrictions and their potential implications.
It is important to note that the enforceability of non-compete agreements varies significantly by jurisdiction. Some states are more lenient towards non-competes, while others have stricter rules or even prohibit them altogether. Therefore, a prospective franchisee should consult with an attorney to understand how the non-compete agreement would be interpreted and enforced in their specific location.