Does the Gokhale Method agreement allow for written approval to bypass the in-term covenants?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
You covenant that during the Term of this Agreement, except as otherwise approved in writing by us, you shall not, either directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person or legal entity:
- 17.1.1.
Divert or attempt to divert any present or prospective customer of any Gokhale Method class, service or product to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System;
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the franchise agreement addresses the possibility of obtaining written approval to bypass in-term covenants. Specifically, during the term of the agreement, franchisees are subject to certain covenants, meaning promises or obligations. However, these covenants can be bypassed if the franchisee obtains written approval from Gokhale Method.
These in-term covenants include restrictions on diverting customers to competitors or engaging in activities that could harm the goodwill associated with the Gokhale Method brand and system. They also include restrictions on employing or soliciting employees of Gokhale Method or its other franchisees, and restrictions on engaging in competitive businesses.
The clause providing for written approval gives Gokhale Method some flexibility in enforcing these covenants. It also means that a franchisee might be able to negotiate an exception to a covenant if they have a legitimate business reason and can obtain Gokhale Method's consent in writing. Without this clause, the in-term covenants would be absolute, with no room for exceptions.