How Reasonable Are The Restrictive Covenants In Your Franchise Contract?

Select Your Franchise (blog):

A recent case1 has highlighted the courts reluctance to intervene in “rewriting” RC’s to make them enforceable. This means it is even more important to ensure that your RC’s are reasonable.

RC’s – the Law
The general rule is – a franchisor has a legitimate right to protect its interests in the territory where its franchisees operate – i.e. when a franchise comes to an end for a reasonable period of time the franchisor can prevent the former franchisee from competing with the incoming franchisee, and from poaching staff and/or employees etc.

What is reasonable? Read on…