Which sections of the Afuri Ramen Dumpling FDD and Franchise Agreement address confidentiality and non-competition?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
. Except in connection with an Afuri franchise, you will never communicate, divulge, or use in any manner, either for your benefit or the benefit or any other person, persons, partnerships, associations, companies or corporations any Confidential Information or proprietary information, knowledge or know-how concerning the System or any information we have communicated to you in written, verbal or electronic form, including intranet passwords, for the operation of your business.
- 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.
- 6.2 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. Accordingly, you agree that if you breach or take steps preliminary to breaching this Agreement, we shall be entitled, in addition to all other remedies we may have at law or in equity, to a restraining order, temporary and permanent injunctive relief, specific performance, or other appropriate equitable relief, without showing or proving that we actual sustained any damage.
9 MISCELLANEOUS
- 9.1 Duration. The obligations set forth in this Agreement related to non-disclosure and nonuse of Confidential Information will continue during and beyond the term of your relationship with the Franchisee and for as long as you possess any Confidential Information in any manner.
- 9.2 Waiver. A waiver of any breach of any provision, term, covenant, or condition of this Agreement will not be a waiver of any subsequent breach of the same or any other provision, term, covenant, or condition. Any waiver to this Agreement's provisions must be made in signed writing by the granting party.
- 9.3 Arbitration.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling FDD, Item 23 includes several provisions addressing confidentiality and non-competition. Specifically, section 3 outlines a covenant of non-use, preventing franchisees from using confidential information or the Afuri Ramen Dumpling system without authorization. This extends to the franchisee's owners, board of directors, employees, and agents, all of whom must adhere to the same restrictions. Any permitted use of confidential information requires written approval from Afuri Ramen Dumpling. Section 4 mandates the return of all materials containing confidential information upon request, ensuring Afuri Ramen Dumpling retains exclusive ownership of such information. Section 5 emphasizes the non-disclosure of recipes, prohibiting franchisees from using or sharing them outside the scope of their Afuri Ramen Dumpling franchise.
Section 6 of Item 23 details the non-competition covenant, which applies both during the franchisee's association with Afuri Ramen Dumpling and for two years afterward. This prevents franchisees from participating in businesses that offer ramen, other Japanese-style cuisine, Vietnamese pho, or any products or services substantially similar to those offered by Afuri Ramen Dumpling. The restrictions extend to various roles, including owner, director, officer, employee, consultant, and agent.
Additionally, section 6.7 addresses non-competition upon expiration, termination, or transfer of the agreement. It states that for two years after such events, franchisees and their owners must not engage in competitive businesses within the franchise territory, a 50-mile radius of the territory, a 50-mile radius of any Afuri Ramen Dumpling location, or anywhere in the United States. Exceptions may apply to pre-existing businesses, as outlined in the Pre-Existing Business Addendum. Franchisees acknowledge that these restrictions are fair and reasonable and will not cause undue hardship.