Must the franchisee and all holders of legal/beneficial interest in the franchisee execute and deliver a non-disclosure and non-competition agreement to All States M.E.D.?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor has the right to require any holder of a legal or beneficial interest in Franchisee, and any officer, director, executive, manager or member of the professional staff and all employees of Franchisee to execute a nondisclosure and non-competition agreement, in a form the same as or similar to the Nondisclosure and Non-Competition Agreement attached as Schedule 2, upon execution of this Agreement or prior to each such person's affiliation with Franchisee. Upon Franchisor's request, Franchisee shall provide Franchisor with copies of all nondisclosure and non-competition agreements signed according to this Section. Such agreements shall remain on file at the business of Franchisee and are subject to audit or review as otherwise stated here. Franchisor shall be a third-party beneficiary with the right to enforce covenants contained in such agreements.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, All States M.E.D. has the right to require any holder of legal or beneficial interest in the franchisee to execute a non-disclosure and non-competition agreement. This agreement must be in a form similar to the one attached as Schedule 2 of the Franchise Agreement. This requirement can be implemented upon execution of the agreement or before the person's affiliation with the franchisee.
The franchisee is obligated to provide All States M.E.D. with copies of all non-disclosure and non-competition agreements signed. These agreements must be kept on file at the franchisee's business and are subject to audit or review. All States M.E.D. is considered a third-party beneficiary and has the right to enforce the covenants within these agreements.
These restrictions are considered essential elements of the Franchise Agreement, and All States M.E.D. would not enter into the agreement without them. The franchisee acknowledges that these terms, including the restrictive covenants, are fair, reasonable, and necessary to protect All States M.E.D., its system, and its marks.
In addition to holders of legal or beneficial interest, All States M.E.D. can require any officer, director, executive, manager, member of the professional staff, and all employees of the franchisee to sign a non-disclosure and non-competition agreement. This ensures a broad protection of All States M.E.D.'s confidential information and business interests.