Which provisions of the Aplus Franchise Agreement does the third-party beneficiary have the independent right to enforce?
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 certain individuals connected to the franchisee to execute a nondisclosure agreement. These individuals include anyone holding a legal or beneficial interest in the franchisee (including family members), as well as officers, directors, executives, managers, professional staff, and all employees of the franchisee.
The nondisclosure agreement must be in a form similar to the one attached to the Franchise Agreement as Attachment 2. Upon Aplus's request, the franchisee must provide copies of all signed Non-Disclosure Agreements, which must be kept on file at the franchisee's offices and are subject to audit or review.
Aplus is designated as a third-party beneficiary with the independent right to enforce the covenants within these nondisclosure agreements. This means that Aplus can directly take legal action to enforce the terms of the nondisclosure agreements against the individuals who signed them, without needing to involve the franchisee.