Can Aplus require individuals with a legal or beneficial interest in the Franchisee, their families, officers, directors, executives, managers, professional staff, and employees 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 certain individuals to sign a nondisclosure agreement. Specifically, Aplus can require any holder of a legal or beneficial interest in the franchisee, including members of their immediate families or households, to sign an agreement.
Additionally, Aplus can mandate that any officer, director, executive, manager, or member of the professional staff, as well as all employees of the franchisee, execute a nondisclosure agreement. The agreement must be in a form that is the same as or similar to the Non-Disclosure Agreement attached as Attachment 2 in the FDD.
These nondisclosure agreements must be executed upon the execution of the franchise agreement or before each individual's affiliation with the franchisee. Upon Aplus's request, the franchisee must provide copies of all signed Non-Disclosure Agreements, which will be kept on file at the franchisee's offices 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.