Does the Focus Cfo franchise agreement specify what happens if a covenant restricting competitive activity is deemed unenforceable?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as expressly provided to the contrary in this Agreement, each section, paragraph, term, and
provision of this Agreement is severable, and if, for any reason, any part is held to be invalid or contrary to or in conflict with any applicable present or future law or regulation in a final, unappealable ruling issued by any court, agency, or tribunal with competent jurisdiction, that ruling will not impair the operation of, or otherwise affect, any other provisions of this Agreement, which will continue to have full force and effect and bind the parties. 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 agrees 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 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
According to the 2025 Focus Cfo Franchise Disclosure Document, the franchise agreement addresses the scenario where a covenant restricting competitive activity is deemed unenforceable. Specifically, the agreement states that if such a covenant is considered unenforceable due to its scope (area, business activity, or time), but could be enforceable with modifications, the franchisee agrees that the covenant will be enforced to the fullest extent permissible under applicable laws and public policies. This means that a court could modify the covenant to make it enforceable, rather than striking it down completely.
This provision is important for prospective Focus Cfo franchisees because it clarifies that Focus Cfo intends to enforce non-compete agreements to the maximum extent legally possible. It also means that a franchisee cannot assume that a non-compete clause is entirely invalid simply because its initial scope is deemed too broad. Instead, a court may narrow the scope to achieve enforceability.
This approach is fairly common in franchise agreements, as franchisors have a legitimate interest in protecting their brand, trade secrets, and customer relationships. Franchisees should carefully consider the implications of these non-compete provisions and seek legal counsel to understand their rights and obligations under the agreement.