What is the Baya Bar franchisee's responsibility regarding their employees' compliance with restrictions on using confidential information?

According to Baya Bar's 2024 Franchise Disclosure Document, the franchisee bears the responsibility of ensuring their employees (referred to as 'Covenantor' in the agreement) comply with the terms outlined in the confidentiality and non-compete agreements. This means the franchisee must actively oversee and enforce the employee's adherence to these agreements. Specifically, the franchisee is responsible for making sure that their employees protect the confidential information related to the Baya Bar system.

The confidentiality agreement stipulates that employees must maintain the confidentiality of the Baya Bar's confidential information, using it only for their work within the franchise. Employees cannot copy documents with confidential information without Baya Bar's permission, and they can only disclose confidential information to other employees for training purposes. Upon request or termination of employment, employees must return all materials containing confidential information to the franchisee or Baya Bar.

Furthermore, the franchisee is obligated to enforce the non-compete terms, preventing employees from engaging in activities that could harm the Baya Bar system's goodwill. This includes not diverting business to competitors or participating in similar businesses during their employment and for a period of 24 months after their employment ends within a 5-mile radius of any Baya Bar location. Baya Bar also states that the franchisee is obligated to enforce the provisions of this agreement and can seek legal remedies such as injunctions and specific performance to ensure compliance.