In the confidentiality and non-compete agreements required by Afuri Ramen Dumpling, who must be described as a third-party beneficiary?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
- B.
You shall require all of your officers, directors, LLC managers, trustees, beneficiaries, independent contractors, and persons occupying similar positions (who may obtain or who are likely to obtain knowledge concerning our Confidential Information and who do not directly sign this Agreement or the Guaranty Agreement) to execute a confidentiality and non-compete agreement in a form we approve.
We must be described as a third-party beneficiary on such agreements so that we may enforce such agreements (unless we specify otherwise).
It is solely your responsibility to ensure that such agreements comply with legal requirements in your jurisdiction.
- C.
You must assure that your employees, and any other persons in your control, to whom any information is communicated, will keep, preserve, and protect all Confidential Information.
This may include executing confidentiality, non-disclosure and/or non-compete agreements in forms we approve.
We must be described as a third-party beneficiary on such agreements so that we may enforce such agreements (unless we specify otherwise).
It is solely your responsibility to ensure that such agreements comply with legal requirements in your jurisdiction.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the franchisor, Afuri Ramen Dumpling, must be described as a third-party beneficiary in the confidentiality and non-compete agreements that franchisees require their personnel to sign. Specifically, these agreements apply to the franchisee's officers, directors, LLC managers, trustees, beneficiaries, independent contractors, and individuals in similar positions who may gain knowledge of Afuri Ramen Dumpling's confidential information but do not directly sign the Franchise Agreement or Guaranty Agreement.
This requirement ensures that Afuri Ramen Dumpling has the legal right to enforce these agreements directly against the franchisee's personnel, protecting its confidential information and trade secrets. Without being named a third-party beneficiary, Afuri Ramen Dumpling would have to rely on the franchisee to enforce these agreements, which could be less effective.
This is a fairly standard practice in franchising, as franchisors need to protect their proprietary information and systems. By requiring franchisees to have their personnel sign these agreements with the franchisor as a third-party beneficiary, Afuri Ramen Dumpling maintains greater control over the protection of its confidential information and can take direct legal action if necessary.