Contracts — And Facts — Matter For Franchise Noncompetes
February 27, 2014, 6:40 PM EST
Law360, New York (February 27, 2014, 6:40 PM EST) -- Virtually every franchise agreement includes language restricting the franchisee’s ability to operate in a business similar to the franchised concept both in-term and for a certain period of time after the agreement ends. In most (but not all) jurisdictions, courts will scrutinize the nature, extent and duration of the restriction before enforcing a covenant against a franchisee, and are generally willing to enforce noncompetition covenants if they are reasonable.
Three recent cases illustrate the importance of carefully drafting covenant provisions in franchise agreements, and also being...