What are the key restrictions outlined in the 'Confidentiality and Non-Competition Agreement' (Exhibit J) for Afuri Ramen Dumpling franchisees?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
request by us, you will promptly return to us all documents or other tangible property that contains Confidential Information.
- 5 RECIPES. Without limiting the generality of the non-disclosure and non-use provisions in this Agreement, you specifically agree not to disclose or use our recipes (by yourself or by or through any other entity or individual) in any manner other than in connection with Afuri franchises pursuant to the Franchise Agreement.
6 NON-COMPETITION COVENANT.
6.1 Covenant. During the term of your association with Franchisee and for two years thereafter, you will not directly or indirectly (including by or through any other person or entity) participate as an owner, director, officer, employee, consultant, licensor, licensee, distributor, or agent, or serve in any other capacity in any business engaged in the offer, sale, or promotion of: (1) ramen, (2) other Japanese style cuisine, (3) Vietnamese pho, or (4) any business that offers products or services that are essentially the same as, or substantially similar to, the products and services that are part of the
System.
- 6.2 Geographic Scope. During the term of your association with Franchisee, the covenants described in Section 6.1 above shall apply worldwide. During the two-year period after your association with Franchisee, such covenants will apply within the Development Territory, within a 50-mile radius of the Development Territory, and within a 50-mile radius of any location or designated territory where we operate or have granted the franchise to operate an Afuri business.
- 7 NON-DIVERSION OF BUSINESS. During the term of your association with Franchisee and for two years thereafter, you will not:
- A. divert or attempt to divert any of our business or any of our customers to any competing establishment; or
- B. do anything harmful to our goodwill associated with the Marks and System.
- 8 REMEDIES: INJUNCTION AND DAMAGES. You acknowledge that any disclosure of Confidential Information will cause irreparable harm to us. You agree that it may be difficult to measure damage to us from any breach by you or your employees and agents of this Agreement. You agree that monetary damages may be an inadequate remedy for any such breach.
Source: Item 22 — Contracts (FDD page 50)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling FDD, the Confidentiality and Non-Competition Agreement places several restrictions on franchisees, both during their association with the franchise and for a period of two years after termination or transfer of the agreement. During the term of the franchise agreement, franchisees are restricted from using confidential information or the Afuri Ramen Dumpling system, except as authorized by the franchisor. This non-use covenant extends to the franchisee's owners, board of directors, employees, and agents. Any use of confidential information or the system requires the franchisor's prior written approval.
For two years after the end of the franchise agreement, franchisees (including their owners, shareholders, partners, directors, officers, employees, and agents with knowledge of the Operations Manual or System) are restricted from participating in any business involved in the offer, sale, or promotion of ramen, other Japanese-style cuisine, Vietnamese pho, or any business offering products or services substantially similar to those of the Afuri Ramen Dumpling system.
These non-competition restrictions apply within the Franchise Territory, within a 50-mile radius of the Franchise Territory, within a 50-mile radius of any location or franchise territory where Afuri Ramen Dumpling operates or has granted a franchise, and within the United States of America. Certain exceptions may apply to franchisees operating existing restaurants with similar food items, as detailed in the Pre-Existing Business Addendum. Franchisees acknowledge that these restrictions are fair, reasonable, and do not cause undue hardship.