Does the confidentiality obligation for Azal Coffee extend to family members of the Franchisee Parties?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
You and your shareholders, officers, directors, partners, members, managers, owners and investors, Family Members, and affiliates, must not, during the term of this Agreement and for a period of three (3) years after termination, expiration, or non-renewal of this Agreement, directly or indirectly: (a) divert or attempt to divert any business or customer of the Franchise Business or any other Store to any Competing Business by direct or indirect inducements or otherwise; (b) sponsor, appoint or encourage or influence or promote friends, relatives or associates to operate a Competing Business; or (c) employ any person or furnish of permit access to our Confidential Information to any person who is engaged or has arranged to become engaged in any activity in competition with Azal Coffees, including involvement, either as an owner (except no more than one percent (1%) of the publicly traded securities of an entity), member, manager, partner, director, officer, employee, consultant, lender, representative or agent, or in any other capacity, of any business that is involved, in whole or in part, in a Competing Business or in any business or entity that franchises, licenses or otherwise grants to others the right to operate a Competing Business.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the confidentiality obligations do extend to family members of the Franchisee Parties. The FDD specifies that "Family Members" are included in the restrictions regarding competition with Azal Coffee. This means that family members are also bound by the non-compete and confidentiality clauses within the franchise agreement.
The term "Family Members" is explicitly defined in the FDD to include a wide range of relationships with the Franchisee Party, such as spouses, children, grandchildren, stepchildren, parents, siblings, spouse's parents, and spouse's siblings. This broad definition ensures that the confidentiality and non-compete obligations extend to those who may have access to confidential information or could potentially influence business decisions.
This obligation lasts during the term of the Franchise Agreement and for a period of three years after termination, expiration, or non-renewal of the agreement. This restriction prevents family members from diverting business, encouraging others to operate competing businesses, or employing individuals involved in activities that compete with Azal Coffee. This is a fairly standard practice in franchising to protect the franchisor's business interests and confidential information.