In franchise agreements, a restraint of trade clause will not be upheld where the franchisor's interest in confidential information and industrial property is already sufficiently protected by other contractual provisions (such as return/destruction obligations and prohibitions on use), and where there is no evidence that the franchisee would develop customer connections that might lead customers to follow the franchisee to a competing business. The location-based goodwill of a franchise business remains with the franchisee where the franchisor has not acquired the leasehold interests. Reasonableness of restraints must be assessed as at the date of the agreement, and subsequent consequences (such as loss of employment) that were not foreseeable at that date are irrelevant.
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