Is it a requirement for Azal Coffee franchisees to have employees and agents sign confidentiality and/or non-competition agreements?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
r Term.
On the termination (including termination on transfer), expiration, or non-renewal of this Agreement, you and your shareholders, officers, directors, partners, members, managers, owners and investors, Family Members, and affiliates, must not, for a period of three (3) years commencing on the later of the effective date of termination, expiration, or non-renewal, or the date of any Court order enforcing this provision, directly or indirectly, engage in any activity in competition with us or our franchisees and licensees, including involvement, whether as an owner (except ownership of no more than one percent (1%) of a publicly traded entity), partner, director, officer, member, manager, employee, consultant, lender, representative or agent, or in any other capacity in 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; provided that, the restrictions in this Section will only apply within the "Geographic Areas" (defined in Section 13.4).
13.3 Other Restrictions.
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;
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
Based on the 2024 Azal Coffee Franchise Disclosure Document, franchisees and related parties are subject to certain restrictions regarding competition and confidentiality. Specifically, the franchisee, along with their shareholders, officers, directors, members, managers, partners, owners, investors, family members, and affiliates, are prohibited from engaging in activities that could harm Azal Coffee's business interests. This includes diverting customers, promoting competing businesses, or employing individuals who might use confidential information against Azal Coffee. These restrictions apply during the term of the Franchise Agreement and extend for three years after its termination, expiration, or non-renewal.
The agreement emphasizes the importance of protecting Azal Coffee's confidential information and trade secrets. Franchisees acknowledge that they will receive confidential information related to the operation of their Azal Coffee store and agree not to disclose this information to any other party or use it to compete against Azal Coffee or its other franchisees. This obligation is designed to safeguard Azal Coffee's competitive advantage and maintain the integrity of its franchise system.
While the FDD outlines the franchisee's obligations regarding confidentiality and non-competition, it does not explicitly state whether franchisees are required to have their employees or agents sign similar agreements. However, the document does state that franchisees cannot 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. Prospective franchisees should clarify with Azal Coffee whether they are required to have their employees and agents sign confidentiality and/or non-competition agreements to ensure full compliance with the franchise agreement and to protect Azal Coffee's confidential information.