Does the Azal Coffee Franchise Agreement include a specific exhibit outlining the terms of a Confidentiality/Non-Competition Agreement?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
WHEREAS, the Company is the Franchisor of Azal Coffee Stores and has the authority to disclose and discuss all information relating to the operations of an Azal Coffee Store;
WHEREAS, Confidential Information and Trade Secrets, which are more particularly described below, will be disclosed to the Franchisee Parties in relation to Franchisee's operation of its Azal Coffee Store franchise; and
WHEREAS, the Franchisee Parties understand the necessity of not disclosing any such information to any other party or using such information to compete against the Company, any affiliate(s) or other franchisee(s) of the Company, or in any business (i) that is a Competing Business (as defined below) or (ii) in which Trade Secrets and other Confidential Information (as defined below) could be used to the disadvantage of Franchisee, or the Company, any affiliate(s) of the Company, or the Company's other franchisees.
NOW, THEREFORE, in order to induce the Company to transmit the aforesaid information to the Franchisee Parties, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agree as follows:
1) Franchise System
- a) The Company franchises a system for operation of a coffee café that specializes in Yemeni-grown coffee and that sells coffee based beverages, cold drinks, teas, coffee beans, coffee accessories, pastries, baked goods, and other related items, all of which are proprietary and are identified by the public with Azal Coffee products; prescribed exterior and interior design, decor, seating, fixtures, and furnishings; standards and specifications for products and supplies; service standards; uniform standards, specifications, and procedures for operations; training and assistance; and advertising and promotional programs (collectively "Systems"); all of which may be changed, improved, and further developed by the Company.
- b) A business operated under the Systems, the Company's trademarks, and the Company's trade dress, whether operated by the Company or its affiliates or other persons authorized by the Company, will be referred to in this Agreement as a "Store." The Store that Franchisee is licensed to operate under the Franchise Agreement will be referred to in this Agreement as the "Franchise Business."
2) Definitions.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to the 2024 Azal Coffee Franchise Disclosure Document, the document references a Confidentiality and Trade Secrets agreement. Specifically, it states that confidential information and trade secrets will be disclosed to the franchisee in relation to the operation of their Azal Coffee Store franchise. The franchisee acknowledges the necessity of not disclosing this information to any other party or using it to compete against Azal Coffee, its affiliates, or other franchisees. This agreement is designed to protect Azal Coffee's proprietary information and prevent unfair competition.
The agreement defines key terms such as "Family Members," "Franchise Location," and "Geographic Areas" which are relevant to the scope and enforcement of the confidentiality and non-competition obligations. The term "Geographic Areas" includes the Franchise Location itself, the area within twenty-five (25) miles of the Franchise Location, and the areas within twenty-five (25) miles of any other Azal Coffee Store existing or in development at the time the franchisee ceases to operate the Competing Business. These definitions clarify the extent to which the franchisee is restricted from operating a competing business near existing or future Azal Coffee locations.
The document emphasizes that the agreement is made to induce Azal Coffee to share confidential information with the franchisee, indicating the importance of these protections to the franchisor. The franchisee's agreement to these terms is a condition for receiving the information necessary to operate the franchise. This arrangement is typical in franchising, where protecting trade secrets and preventing competition from former franchisees is crucial for maintaining the integrity and value of the franchise system.