Under what circumstances must a Belocal franchisee have personnel sign the Confidentiality Agreement and Ancillary Covenants Not to Solicit agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
We require all Principals to sign a Principals' Undertaking (attached to the Franchise Agreement as Attachment C), binding themselves individually to certain provisions of the Franchise Agreement, including the covenants against competition (Owners only) and solicitation and those restricting use of the Marks and disclosure of confidential information, restrictions on transfer, and dispute resolution procedures. The Principals must also guaranty amounts owed by the franchisee to us or our affiliates. We do not require an Owner's spouse to sign the Principals' Undertaking or otherwise personally guaranty the performance of the Franchise Agreement. At our request, you must have any other personnel who will have access to our confidential information, but whom we do not designate as a Principal, sign the Confidentiality Agreement and Ancillary Covenants Not to Solicit agreement attached to the Franchise Agreement as Attachment D-2. We have the right, in our sole discretion, to decrease the period of time or geographic scope of the covenants or eliminate the covenants altogether for any person who signs the Principals' Undertaking and the Confidentiality Agreement and Ancillary Covenants Not to Compete or Ancillary Covenants Not to Solicit agreements.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 47–48)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee must ensure certain personnel sign the Confidentiality Agreement and Ancillary Covenants Not to Solicit. Specifically, Belocal requires all Principals to sign a Principals' Undertaking, which binds them to certain provisions of the Franchise Agreement, including covenants against competition and solicitation, restrictions on the use of Marks, disclosure of confidential information, transfer restrictions, and dispute resolution procedures. These Principals must also guarantee amounts owed by the franchisee to Belocal or its affiliates. However, an Owner's spouse is not required to sign this undertaking or personally guarantee the Franchise Agreement.
Beyond the Principals, Belocal can request the franchisee to have other personnel sign the Confidentiality Agreement and Ancillary Covenants Not to Solicit agreement. This applies to any personnel who will have access to Belocal's confidential information but are not designated as a Principal. The specific agreement to be used is attached to the Franchise Agreement as Attachment D-2.
Belocal retains the right to modify or eliminate these covenants for any person signing the Principals' Undertaking and the Confidentiality Agreement and Ancillary Covenants Not to Compete or Ancillary Covenants Not to Solicit agreements. This modification can include decreasing the time period or geographic scope of the covenants or eliminating them altogether, at Belocal's sole discretion. This flexibility allows Belocal to tailor the restrictions based on the individual's role and access to confidential information.