Franchise Non-Compete Agreements: Mostly Unenforceable as Written

The Relevant Legal Framework and How We Got Here Over the past several decades, courts in many jurisdictions have routinely issued injunctions in franchise non-compete cases, incorrectly treating these matters as pure breach of contract cases rather than antitrust cases. The analysis often centers on one fact: that the franchisee signed a contract. From there, franchisors will often make generic allegations about confidential information or customer goodwill, causing courts to overlook the applicable "legitimate business interest" test, leading to a rubber-stamped injunction in the process. This is wrong and has led to the erosion of many logical (and legal) defenses to non-compete claims. F

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