Does Azal Coffee have the right to be a third-party beneficiary of the employee confidentiality agreement with independent enforcement rights?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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 confidentiality and/or non-competition agreements before disclosing confidential information to them. These agreements must be in a form approved by Azal Coffee.
Specifically, Azal Coffee retains the right to be a third-party beneficiary of the employee confidentiality agreement, which means Azal Coffee can directly enforce the terms of the agreement against the employee, even though Azal Coffee is not a direct party to the agreement between the franchisee and their employee. This provides Azal Coffee with an additional layer of protection for its confidential information and trade secrets.
The FDD also states that Exhibit E contains a form of Confidentiality and Noncompetition Agreement approved by Azal Coffee for use by its franchisees. However, Azal Coffee does not represent that this form is appropriate for use by the franchisee or that it complies with applicable laws in the franchisee's jurisdiction. Therefore, 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.