Who does the Amorino release agreement benefit, besides the parties directly involved?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor has signed or intends to sign a franchise agreement with Franchisee (the "Franchise Agreement"), under which Franchisor grants to Franchisee certain rights with regard to the development and operation of an Amorino Store (all capitalized terms used but not defined herein shall have the meanings set forth in the Franchise Agreement). Before allowing Covenantor to have access to the Confidential Information (defined below), and as a material requirement necessary to protect Franchisor's proprietary rights in and Franchisee's right to use the Confidential Information, Franchisor and Franchisee require that Covenantor enter into this Agreement.
To induce Franchisor to enter into the Franchise Agreement and/or to avoid a material breach thereof, as the case may be, Franchisor, Franchisee and Covenantor desire that Covenantor enter into this Agreement. Furthermore, due to the nature of Franchisor's and Franchisee's business, any use or disclosure of the Confidential Information other than in accordance with this Agreement will cause Franchisor and Franchisee substantial harm.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to the 2025 Amorino FDD, the Confidentiality and Non-Competition Agreement involves three parties: the Franchisor (Amorino), the Franchisee, and the Covenantor. The agreement is structured to protect Amorino's proprietary rights and the franchisee's right to use confidential information. Before allowing the Covenantor access to confidential information, Amorino and the franchisee require the Covenantor to enter into this agreement, indicating that the agreement benefits both parties.
The agreement explicitly states that any use or disclosure of confidential information outside the agreement's terms will cause substantial harm to both Amorino and the franchisee. This highlights the shared interest in maintaining confidentiality. The Covenantor's commitment is essential to induce Amorino to enter into the Franchise Agreement or to avoid a material breach, further emphasizing the mutual benefit derived from the agreement.
In practical terms, this means that anyone (the Covenantor) gaining access to Amorino's confidential information through the franchisee is legally bound to protect that information. This setup reduces the risk of information leaks and competitive disadvantages for both Amorino and its franchisees. Prospective franchisees should understand that this agreement is a standard measure to safeguard the Amorino system and their investment in it.