Under what condition might the 'Restricted Period' for an Itan employee or contractor be shortened?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
"Restricted Period" means the two (2) year period after you cease to be an employee or independent contractor of Franchisee; provided, however, that if a court of competent jurisdiction determines the twoyear period is too long to be enforceable then Restricted Period means the one-year period after you cease to be an employee or independent contractor of Franchisee.
(e) Covenants Reasonable.
You agree that: (i) the covenants in this Agreement are reasonable both in duration and geographic scope; and (ii) you have sufficient resources, business experience and opportunities to earn an adequate living while complying with this Agreement.
Although you and we both believe the covenants in this Agreement are reasonable, we may at any time unilaterally modify the terms of the brand protection covenants in §3 of this Agreement, upon written notice to you, by limiting the scope of the Prohibited Activities, narrowing the definition of a Competing Business, shortening the duration of the Restricted Period, reducing the geographic scope of the Restricted Territory and/or reducing the scope of any other covenant imposed upon you under §3 of this Agreement to ensure that the covenants are enforceable under applicable law.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the standard 'Restricted Period' for an employee or independent contractor is two years after they cease their association with an Itan franchisee. However, this period can be shortened under specific circumstances.
Specifically, if a court of competent jurisdiction determines that the initial two-year restriction is too long to be enforceable, the 'Restricted Period' is automatically reduced to one year. This provision acknowledges that overly broad or lengthy non-compete agreements may not be legally upheld, and it provides a built-in mechanism to adjust the restriction to a more reasonable and enforceable duration. This adjustment aims to balance Itan's interest in protecting its brand and confidential information with the individual's right to pursue their livelihood.
Additionally, Itan retains the right to unilaterally modify the terms of the brand protection covenants, including shortening the duration of the 'Restricted Period,' to ensure the covenants are enforceable under applicable law. This allows Itan to adapt the restrictions based on changes in legislation or legal precedents, providing flexibility in maintaining enforceable non-compete agreements with its franchisees and their employees or contractors.