Does Azal Coffee require franchisees to have employees sign a confidentiality and/or non-competition agreement?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 39–41)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, Azal Coffee may require franchisees to have their 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 Azal Coffee, and Azal Coffee has the right to be a third-party beneficiary of that agreement with independent enforcement rights. A form of Confidentiality and Noncompetition Agreement approved by Azal Coffee for use by its franchisees is attached as Exhibit E.
While Azal Coffee provides a sample agreement, the FDD indicates that Azal Coffee does not represent or suggest that this is the appropriate form for use by the franchisee or that the form complies with the applicable laws in their jurisdiction. Azal Coffee recommends that franchisees have any employee confidentiality and/or noncompetition agreement forms they intend to use reviewed by their attorney to ensure the form provides them with the protections that they desire and that the form complies with the applicable laws in their jurisdiction.
This means that while Azal Coffee provides a template, franchisees are ultimately responsible for ensuring their employee agreements are legally sound and provide adequate protection for their business. It is a common practice in franchising to have employees sign such agreements to protect the franchisor's and franchisee's confidential information and prevent unfair competition.