Is it a required action for Afuri Ramen Dumpling franchisees to obtain confidentiality agreements from their employees?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
5.6.5 You shall comply with the following to protect our Confidential Information.
A.
If you are an entity, then each of your owners must either sign this Agreement directly or sign the personal guaranty attached to this Agreement as an Exhibit, which obligates the guarantors to be personally bound by all obligations of this Agreement, including its confidentiality and non-competition covenants.
- 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.
- D.
You must adopt and implement all reasonable procedures we may prescribe periodically to prevent the unauthorized use or disclosure of any of our Confidential Information.
If you become aware of any actual or threatened unauthorized use or disclosure of our Confidential Information, then you will promptly and fully advise us
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, franchisees are required to take specific actions to protect the franchisor's confidential information. If the franchisee is an entity, each owner must sign the agreement directly or sign a personal guarantee, obligating them to uphold the confidentiality and non-competition covenants. Franchisees must also ensure that their officers, directors, LLC managers, trustees, beneficiaries, independent contractors, and similar personnel who may access confidential information execute a confidentiality and non-compete agreement in a form approved by Afuri Ramen Dumpling. These agreements must designate Afuri Ramen Dumpling as a third-party beneficiary, allowing them to enforce the agreements unless otherwise specified. It is the franchisee's responsibility to ensure these agreements comply with local legal requirements.
Furthermore, Afuri Ramen Dumpling franchisees must ensure that all employees and individuals under their control who receive confidential information keep it protected. This may involve having these individuals sign confidentiality, non-disclosure, and/or non-compete agreements in a form approved by Afuri Ramen Dumpling, again with Afuri Ramen Dumpling named as a third-party beneficiary. The franchisee is responsible for ensuring these agreements meet local legal standards. Franchisees must also adopt and implement reasonable procedures prescribed by Afuri Ramen Dumpling to prevent unauthorized use or disclosure of confidential information.
In practice, this means that prospective Afuri Ramen Dumpling franchisees should be prepared to manage and enforce confidentiality agreements with a wide range of individuals associated with their franchise, including owners, managers, employees, and contractors. They should also budget for the legal costs associated with drafting and enforcing these agreements to ensure compliance with local laws. Failure to comply with these requirements could result in legal action from Afuri Ramen Dumpling, as they retain the right to enforce these agreements as a third-party beneficiary.