factual

Are Azal Coffee Franchisee Parties allowed to claim any right or interest in the Information?

Azal_Coffee Franchise · 2024 FDD

Answer from 2024 FDD Document

[Item 22: CONTRACTS]

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.

  • c) The Franchisee Parties and their shareholders, officers, directors, members, managers, partners, owners, and investors, Family Members, and affiliates, must not, during the term of the Franchise Agreement and for a period of three (3) years after termination, expiration, non-renewal, or any other end of the Franchise Agreement, for any reason whatsoever, 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 or permit access to the Information to any person who is engaged or has arranged to become engaged in any activity in competition with Azal Coffee Stores, including involvement, either as an owner (except no more than one percent (1%) of the publicly traded securities of an entity), partner, director, officer, member, manager, 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

Source: Item 22 — CONTRACTS (FDD page 51)

What This Means (2024 FDD)

According to Azal Coffee's 2024 Franchise Disclosure Document, Franchisee Parties are restricted from claiming rights or interests in the Information. The agreement emphasizes that Confidential Information and Trade Secrets will be disclosed to the Franchisee Parties specifically for operating their Azal Coffee Store franchise.

The document makes it clear that Franchisee Parties cannot disclose this information to any other party or use it to compete against Azal Coffee, its affiliates, or other franchisees. This restriction extends to any business that is a Competing Business or any business where Trade Secrets and other Confidential Information could be used to the disadvantage of Azal Coffee or its franchisees.

Moreover, after the termination, expiration, or non-renewal of the Franchise Agreement, the Franchisee Parties are prohibited for three years from diverting business, encouraging others to operate a Competing Business, or employing individuals involved in competitive activities. This includes involvement as an owner (beyond 1% of publicly traded securities), partner, director, officer, member, manager, employee, consultant, lender, representative, or agent in any business involved in a Competing Business. These measures ensure that the Information remains proprietary to Azal Coffee and its franchise system, preventing franchisees from leveraging it for their own competitive advantage.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.