Does the Employee/Independent Contractor Confidentiality and Non-Competition Agreement for Annex Brands prevent an employee from referring customers to competitors in good faith?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) During your engagement or employment, you will not, directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person or entity, divert or attempt to divert any business or customer of ours to any competitor or other person by direct or indirect inducement or otherwise, but this Section will not prevent you from referring customers in good faith to other businesses, including but not limited to competitors' businesses, that may be able to provide those customers with products or services not available from our business.
Source: Item 23 — Receipts (FDD pages 110–299)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, the Employee/Independent Contractor Confidentiality and Non-Competition Agreement does not prevent an employee from referring customers to competitors in good faith. The agreement states that during employment, an employee cannot directly or indirectly divert or attempt to divert any business or customer to a competitor. However, there is an exception to this clause.
The agreement explicitly states that the non-compete section will not prevent an employee from referring customers in good faith to other businesses, including competitors, if the franchisee's business cannot provide the needed products or services. This provision protects the employee from being penalized for making a referral that is in the customer's best interest.
This clause provides a benefit to both the employee and the customer. The employee is not restricted from providing helpful referrals, and the customer can obtain the necessary products or services, even if they are not offered by the Annex Brands franchise. This good-faith exception promotes ethical business practices and customer satisfaction.