What happens if a provision of the Monicals Pizza Development Agreement is found to be unenforceable?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
12.9.1 Except as noted below, each paragraph, part, term and provision of this Development Agreement shall be considered severable. If any paragraph, part, term or provision herein is ruled to be unenforceable, unreasonable or invalid, such ruling shall not impair the operation of or affect the remaining portions, paragraphs, parts, terms and provisions of this Development Agreement, and the latter shall continue to be given full force and effect and bind the parties; and such unenforceable, unreasonable or invalid paragraphs, parts, terms or provisions shall be deemed not part of this Development Agreement. If Franchisor determines that a finding of invalidity adversely affects the basic consideration of this Development Agreement, Franchisor has the right to, at its option, terminate this Development Agreement.
12.9.2 Notwithstanding the above, each of the covenants contained in Sections 6 and 9 shall be construed as independent of any other covenant or provision of this Development Agreement. If all or any portion of any such covenant is held to be unenforceable, unreasonable or invalid by a court of competent jurisdiction, then it shall be amended to provide for limitations on disclosure of Confidential Information or on competition to the maximum extent permitted by law.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, the Development Agreement contains a severability clause. This means that if a specific part of the agreement is deemed unenforceable, unreasonable, or invalid, it will not necessarily invalidate the entire agreement. The remaining portions of the Development Agreement will still be in effect and binding on both parties. The unenforceable provision will be considered as if it were not part of the agreement. However, if Monicals Pizza determines that the invalidity of a provision significantly affects the core purpose of the Development Agreement, Monicals Pizza has the option to terminate the entire agreement.
Specifically, the covenants related to confidentiality and non-competition outlined in Sections 6 and 9 of the Development Agreement are treated as independent. If any part of these covenants is found to be unenforceable, it will be amended to provide the maximum possible restrictions on disclosing confidential information or engaging in competition, as permitted by law. This ensures that Monicals Pizza's interests are protected to the greatest extent possible, even if the original terms are deemed too broad.
This approach is fairly standard in franchise agreements, as it aims to balance the enforceability of the contract with the need to protect the franchisor's business interests. Prospective Monicals Pizza developers should understand that while the agreement is designed to remain in effect as much as possible, there are circumstances where the franchisor may choose to terminate the agreement if a key provision is invalidated.