What happens if an All States M.E.D. franchisee fails to have employees sign a non-disclosure agreement?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
- (h) if required by Franchisor, fails to have 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, 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 or fails to provide Franchisor with copies of all nondisclosure and non-competition agreements signed according to Section 7.4 if requested by Franchisor;
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, the franchisor has the right to terminate the Franchise Agreement, without opportunity to cure, if the franchisee fails to have certain individuals execute a non-disclosure and non-competition agreement. These individuals include any holder of a legal or beneficial interest in the franchisee, any officer, director, executive, manager or member of the professional staff and all employees of the franchisee.
To avoid termination, All States M.E.D. franchisees must ensure that all relevant parties sign a non-disclosure and non-competition agreement, in a form the same as or similar to the Nondisclosure and Non-Competition Agreement attached as Schedule 2. This must occur upon execution of the Franchise Agreement or prior to each such person's affiliation with the franchisee.
Furthermore, the franchisee must provide All States M.E.D. with copies of all signed non-disclosure and non-competition agreements according to Section 7.4 if requested by the franchisor. Failure to comply with these requirements gives All States M.E.D. grounds to terminate the franchise agreement without allowing the franchisee an opportunity to correct the issue.