Can the non-compete covenants in the Hyper Kidz agreement be considered independently of other provisions?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 12.3 The parties agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement.
If all or any portion of a covenant in this Section 12 is held unreasonable or unenforceable by a court or agency having valid jurisdiction in any unappealed final decision to which we are a party, you expressly agree to be bound by any lesser covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and made a part of this Section 12.
12.4 You understand and acknowledge that we shall have the right, in our sole discretion, to reduce the scope of any covenant stated in Sections 12.1 and 12.2 or any portion thereof, without your consent, effective immediately upon receipt by you of written notice thereof, and you agree that you shall comply forthwith with any covenant as so modified, which shall be fully enforceable notwithstanding the provisions of Section 16 hereof.
12.5 You expressly agree that the existence of any claim you may have against us, whether or not arising from this Agreement, shall not constitute a defense to our enforcement of the covenants in this Section 12.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the non-compete covenants within the franchise agreement are designed to be interpreted independently of any other provision in the agreement. This means that if one part of the agreement is found to be unenforceable, the non-compete clauses should still be considered valid and enforceable on their own. This is a fairly common practice in franchising to protect the franchisor's interests.
Specifically, the Hyper Kidz agreement states that if a court finds any portion of the non-compete agreement unreasonable or unenforceable, the franchisee agrees to be bound by a lesser covenant that imposes the maximum duty permitted by law. This ensures that Hyper Kidz can still enforce some form of non-compete, even if the original terms are deemed too restrictive. Furthermore, Hyper Kidz retains the right to reduce the scope of any covenant without the franchisee's consent, providing flexibility in enforcing the non-compete obligations.
The agreement also stipulates that any claims a franchisee may have against Hyper Kidz do not serve as a defense against the enforcement of the non-compete covenants. This reinforces the franchisor's ability to enforce these covenants regardless of any disputes that may arise. This section of the Hyper Kidz franchise agreement is heavily weighted in favor of the franchisor and any potential franchisee should carefully consider the implications of these restrictions and seek legal counsel.