Can the geographic scope of the non-compete agreement for Kidokinetics be reduced if deemed unreasonable?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
If the period of time or the geographic scope specified in Section 2.b. above should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable. In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement or any portion thereof, without Covenantor's or Franchisee's consent, effective immediately upon receipt by Covenantor of written notice thereof, and Covenantor agrees to forthwith comply with any covenant as so modified.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the geographic scope of the non-compete agreement can be reduced if deemed unreasonable. Specifically, if a court finds the geographic scope specified in the agreement to be unreasonable, the geographic scope will be reduced by eliminating a portion of it, so that the restrictions may be enforced for a scope that is considered reasonable.
Additionally, Kidokinetics retains the right to reduce the scope of any covenant within the agreement, or any part of it, at its discretion, without needing the franchisee's consent. This reduction becomes effective immediately once the franchisee receives written notice, and the franchisee is obligated to comply with the modified covenant.
This provision offers a degree of flexibility, ensuring that the non-compete terms are not overly restrictive. It protects the franchisee from potentially unreasonable limitations while still safeguarding Kidokinetics's business interests. Prospective franchisees should be aware of Kidokinetics's ability to unilaterally modify the non-compete scope and seek clarification on how this might be applied in practice.