Can Spray Net reduce the scope of any covenant in the agreement?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Agreement is held unreasonable or unenforceable by a court or agency having valid jurisdiction in any unappealed final decision to which Franchisor is a part, I expressly agree to be bound by any lesser covenant subsumed within the terms of the covenant that imposes the maximum duty permitted by law as if the resulting covenant were separately stated in and made a part of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the agreement states that if a court finds any part of a covenant unreasonable or unenforceable, the franchisee agrees to be bound by a lesser covenant within the terms that imposes the maximum duty permitted by law. This means that if a specific restriction, such as a non-compete clause, is deemed too broad, the franchisee is still obligated to adhere to a narrower, legally acceptable version of that restriction.
This provision protects Spray Net by ensuring that at least some form of the covenant remains in effect, even if the original version is challenged. For a potential franchisee, this means understanding that even if a specific clause seems overly restrictive, there's a mechanism in place for it to be modified rather than completely nullified. This could impact their future business activities, particularly after the franchise agreement ends.
However, the Minnesota Addendum included in the FDD stipulates that nothing in the Franchise Disclosure Document or agreements can reduce any of the franchisee's rights as provided for in Minnesota Statute 80C, or franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction. The Maryland Addendum also states that no statement, questionnaire, or acknowledgment signed by a franchisee shall waive any claims under any applicable state franchise law, including fraud in the inducement, or disclaiming reliance on any statement made by the franchisor. These addenda highlight that state laws may override certain provisions of the franchise agreement, offering additional protection to franchisees in those states.