What is the purpose of the Confidentiality and Non-Competition Agreement for Afuri Ramen Dumpling?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
| This Confidentiality and Non-Competition Agreement (this "Agreement") has been entered effective on the following date: It is by and between | AFURI FRANCHISE INC., an | |
|---|---|---|
| Oregon corporation ("Franchisor" | (jointly and severally | |
| and "we/us") and | ||
| the undersigned individuals | ||
| "you"). | ||
| RECITALS | ||
| A. | ||
| We own valuable goodwill and have valuable Confidential Information (defined below), and | ||
| distinctive business format and color scheme and utilize distinctive, uniform business formats, recipes, | ||
| signs, equipment, layouts, systems, methods, procedures, designs and marketing and advertising standards | ||
| and formats (the "System"). The Confidential Information and System are connected with the | ||
| development and operation of Afuri businesses. | ||
| B. Franchisor and franchise agreement ("Franchise Agreement") on or about [DATE]. The Franchise Agreement requires the Franchisee's owners, officers, directors, and persons occupying similar positions (who may obtain or who are likely to obtain knowledge concerning our Confidential Information) to execute a confidentiality and non-competition agreement. | ("Franchisee") signed that | certain |
- 3 COVENANT OF NON-USE.
You agree not to use Confidential Information or the System, except as authorized by us.
You will obligate your owners, board of directors, your employees, and your agents to the same non-use covenant.
We must approve in writing any use of Confidential Information or System by you or your owners or your directors or employees.
- 4 RETURN OF CONFIDENTIAL INFORMATION.
You agree that all originals and copies of records, data, reports, documents, lists, plans, drawings, correspondence, memoranda, notes, and other materials related to or containing any Confidential Information, in whatever form they exist, whether written, visual, audio, video, or other form of media, shall be our sole and exclusive property.
Upon 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.
6.7 You and Your Owners Not to Compete on Expiration, Termination or Transfer of Agreement.
- 6.7.1 Post-Termination Non-Compete.
This covenant will apply for two years after termination, expiration or transfer of this Agreement.
In express consideration for this Agreement, you will assure that you and your owners, shareholders, partners, directors, officers, employees, and agents, and the members of their immediate families or households (who have actual knowledge of or access to the Operations Manual or System), will not directly or indirectly participate as an owner, shareholder, director, partner, officer, employee, consultant, franchisor, franchisee, distributor, advisor or agent, or serve in any other capacity in any business engaged directly or indirectly in the offer, sale, rental, internet dissemination, 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.
This covenant applies 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 we operate or have granted the franchise to operate an Afuri business, and within the United States of America.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling Franchise Disclosure Document, the Confidentiality and Non-Competition Agreement protects Afuri Ramen Dumpling's valuable goodwill, confidential information, and unique business system. This system includes distinctive business formats, recipes, color schemes, signs, equipment, layouts, methods, procedures, designs, and marketing and advertising standards. The agreement ensures that franchisees and their related parties do not misuse this information or compete unfairly with Afuri Ramen Dumpling, safeguarding the brand's identity and market position.
The agreement includes several key provisions. Franchisees agree not to use confidential information or the Afuri Ramen Dumpling system without authorization and must ensure their owners, directors, employees, and agents also adhere to this restriction. All materials related to confidential information, such as records, data, reports, and recipes, remain the exclusive property of Afuri Ramen Dumpling and must be returned upon request. Franchisees specifically agree not to disclose or use Afuri Ramen Dumpling's recipes outside of the authorized franchise operations.
Furthermore, the agreement contains a non-competition covenant that applies during the franchisee's association with Afuri Ramen Dumpling and for two years after. During this period, franchisees are prohibited from participating in any business that offers ramen, other Japanese-style cuisine, Vietnamese pho, or any products or services substantially similar to those offered by Afuri Ramen Dumpling. This restriction extends to various roles, including owner, director, officer, employee, consultant, or agent, ensuring comprehensive protection against competition.
This non-compete agreement extends not only to the franchise territory but also within a 50-mile radius of the territory, any location where Afuri Ramen Dumpling operates or has granted a franchise, and throughout the United States. While exceptions may exist for pre-existing businesses, the confidentiality and nondisclosure covenants remain in full effect. By agreeing to these terms, franchisees acknowledge that the restrictions are fair and reasonable and that adhering to them will not cause undue hardship or impair their ability to earn a livelihood.