Are the holders of a legal and beneficial interest in the Aplus franchisee required to execute a nondisclosure agreement?
Aplus 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 member of their immediate families or households), and any officer, director, executive, manager, or member of the professional staff and all employees of Franchisee to execute a nondisclosure agreement, in a form the same as or similar to the Non-Disclosure Agreement attached as Attachment 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 Non-Disclosure agreements signed pursuant to this Section 7.4. Such agreements shall remain on file at the offices of Franchisee and are subject to audit or review as otherwise set forth herein. Franchisor shall be a third party beneficiary with the right to enforce covenants contained in such agreements.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Aplus has the right to require any holder of a legal or beneficial interest in the franchisee to execute a nondisclosure agreement. This also extends to members of their immediate families or households. Additionally, Aplus can require any officer, director, executive, manager, member of the professional staff, and all employees of the franchisee to sign a nondisclosure agreement.
The nondisclosure agreement will be in a form similar to the one attached as Attachment 2 in the Franchise Disclosure Document. This agreement must be executed upon signing the franchise agreement or before the person's affiliation with the franchisee. Aplus also requires that the franchisee provide copies of all signed Non-Disclosure agreements, which must be kept on file at the franchisee's office and are subject to audit or review.
Aplus is considered a third-party beneficiary and has the right to enforce the covenants within these agreements. This means that Aplus can take legal action against individuals who violate the terms of the nondisclosure agreements, even though Aplus is not a direct party to the agreement between the franchisee and the individual.