What are the Azal Coffee franchisee's obligations regarding the protection of confidential information and trade secrets (Item 9) and how does this relate to the franchisor's right to protect its proprietary information (Item 14)?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
ormation.
Franchisee's Obligations
You must use our intellectual property only in accordance with our rules. You must use our intellectual property only in connection with the operation of the Franchise Business pursuant to the Franchise Systems and only in the manner specified in the Franchise Agreement or by us. You must not use our intellectual property in connection with any products or services not specifically authorized by us in writing. You must take reasonable steps to prevent disclosure of this information to others. We require that all of your individual owners (if you are a business entity) sign an agreement relating to confidentiality and/or non-competition related to the Azal Coffee system. We may require that you have your employees sign an agreement relating to confidentiality and/or non-competition before disclosing confidential information to them. This agreement must be in a form approved by us and we have the right to be a third-party beneficiary of that agreement with independent enforcement rights. Attached as Exhibit E is a form of Confidentiality and Noncompetition Agreement approved by us for use by our franchisees. We provide this form as an example of the form of agreement acceptable to us; however, we do not represent or suggest that this is the appropriate form for use by you or that the form complies with the applicable laws in your jurisdiction. You should have any employee confidentiality and/or noncompetition agreement forms you intend to use reviewed by your attorney to ensure the form provides you with the protections that you desire and that the form complies with the applicable laws in your jurisdiction.
Under the Franchise Agreement, you agree not to contest, directly or indirectly, our right or interest in our copyrights, trade secrets, methods, and procedures which are part of our business or contest our sole right to register, use or license others to use such copyrights, trade secrets, methods, and procedures.
You must promptly notify us of any claim, suit, or demand against you on account of any alleged infringement, unfair competition, or similar matter relating to your use of our intellectual property. You must promptly notify us if you receive notice or are informed or learn that any third party who you believe is using our intellectual property without our authorization.
Defense of Copyrights and Proprietary Information
If we become aware of a claim against you on account of any alleged infringement, unfair competition, or similar matter relating to your use of our intellectual property, we may take action as we deem necessary and appropriate to protect and defend you against the claim by any third party. You must not settle or compromise any claim by a third party without our prior written consent. We will have the sole right to defend, compromise, or settle any claim, in our discretion,
using attorneys of our choosing, and you agree to cooperate fully with us in connection with the defense of the claim. You may participate at your own expense in the defense or settlement, but our decisions with regard to our intellectual property will be final. We do not have an obligation under the Franchise Agreement to participate in your defense or to indemnify you for expenses or damages in a proceeding involving our intellectual property licensed to you.
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, franchisees have several obligations regarding the protection of confidential information and trade secrets to protect Azal Coffee's proprietary information. Franchisees must use Azal Coffee's intellectual property according to their rules and only in connection with the operation of the Franchise Business. They are prohibited from using this intellectual property for any products or services not specifically authorized in writing by Azal Coffee. Franchisees must take reasonable steps to prevent the disclosure of confidential information to others. Azal Coffee requires that all individual owners of a franchisee business entity sign an agreement relating to confidentiality and/or non-competition related to the Azal Coffee system. Franchisees may also be required to have their employees sign a confidentiality and/or non-competition agreement before disclosing confidential information to them, in a form approved by Azal Coffee, which has the right to be a third-party beneficiary of that agreement with independent enforcement rights.
Under the Franchise Agreement, franchisees agree not to contest Azal Coffee's rights or interests in its copyrights, trade secrets, methods, and procedures, or their sole right to register, use, or license others to use such intellectual property. Franchisees must promptly notify Azal Coffee of any claims, suits, or demands against them regarding alleged infringement, unfair competition, or similar matters relating to the use of Azal Coffee's intellectual property. They must also promptly notify Azal Coffee if they become aware of any unauthorized use of their intellectual property by a third party.
Azal Coffee considers its written materials and other aspects of the Franchise Systems as proprietary and confidential. This includes manuals, training methods, operations methods, knowledge and experience relating to Azal Coffees, advertising, marketing techniques and advertising programs, information regarding the identities and business transactions of customers and suppliers, computer software and similar technology, digital passwords and identifications, source code, data reports, knowledge of operating results and financial performance of Azal Coffees, and related intellectual property. Franchisees acknowledge that a breach of these agreements will cause irreparable harm to Azal Coffee, entitling them to injunctive relief and recovery of all costs and expenses, including attorney's fees, incurred in enforcing the agreement. These obligations extend beyond the term of employment or training, ensuring long-term protection of Azal Coffee's confidential information and trade secrets.