What is the purpose of the restrictive covenants in the Focus Cfo franchise agreement?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that the restrictive covenants contained in this Section 13 are essential elements of this Agreement and that without their inclusion Focus CFO would not have entered into this Agreement.
Franchisee acknowledges that each of the terms set forth herein, including the restrictive covenants, is fair and reasonable and is reasonably required for the protection of Focus CFO, the Focus CFO System and the Focus CFO Marks and Franchisee waives any right to challenge these restrictions as being overly broad, unreasonable or otherwise unenforceable.
If any such provision, or any part thereof, is held to be unenforceable because of the duration of such provision or the area covered thereby, the parties agree that the court making such determination will have the power to reduce the duration and/or area of such
Source: Item 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
According to the 2025 Focus Cfo Franchise Disclosure Document, the restrictive covenants within Section 13 of the franchise agreement are considered essential elements. Focus Cfo states that it would not enter into the agreement without these covenants. These covenants serve to protect Focus Cfo, its system, and its marks.
The franchisee acknowledges that these restrictive covenants are fair, reasonable, and necessary for the protection of Focus Cfo. The franchisee also waives any right to challenge these restrictions as overly broad, unreasonable, or unenforceable. This indicates that Focus Cfo places a high value on protecting its brand, client relationships, and business model from potential harm that could arise from a franchisee's actions, especially after the termination of the agreement.
Specifically, these covenants include non-compete clauses during the term of the agreement and for two years post-termination, preventing franchisees from engaging in competitive activities. They also include non-solicitation clauses, which protect Focus Cfo's relationships with its customers, CFOs, and Area Presidents by preventing franchisees from soliciting or employing them during the term and for two years after termination. These measures are designed to maintain the integrity of the Focus Cfo network and prevent franchisees from leveraging their knowledge and relationships gained during the franchise term to unfairly compete with Focus Cfo.
If a court deems any of these provisions unenforceable due to their duration or geographic scope, the agreement states that the court has the power to reduce the duration or area to make the provision enforceable. This demonstrates an intent to ensure that the restrictive covenants are upheld to the fullest extent permissible by law, further emphasizing their importance to Focus Cfo.