Does the Buff City Soap confidentiality agreement specify any penalties for breach of confidentiality?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
If you violate any of the covenants contained herein, and if any court, tribunal or agency action is instituted by Employer to prevent or enjoin such violation, then the period of time during which the covenants of this Agreement apply will be lengthened by a period of time equal to the period between the date of the breach of the terms or covenants contained in this Agreement and the date on which the decree of the disposition of the tribunal, court or agency having valid jurisdiction of the issues upon the merits will become final and not subject to further appeal.
Any payments received will be in addition to and not in lieu of any other remedies available to Franchisor at law or in equity.
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to the 2025 Buff City Soap Franchise Disclosure Document, if a franchisee violates any of the covenants within the agreement, and Buff City Soap initiates legal action to prevent or stop the violation, the period during which the covenants apply will be extended. This extension will be equal to the time between the date of the breach and the date the court makes a final, unappealable decision on the matter. This clause ensures that any time spent in litigation due to a breach does not count towards the franchisee's restricted period, effectively lengthening the term of their obligations.
Additionally, the FDD states that any payments received by Buff City Soap due to a breach will be in addition to, and not in place of, any other legal remedies available to them. This means that Buff City Soap can pursue multiple avenues of compensation and legal recourse if a franchisee violates the confidentiality agreement. This could include monetary damages, injunctive relief (a court order to stop the violating behavior), and the extended covenant period mentioned above.
This multifaceted approach to penalties underscores the importance Buff City Soap places on protecting its confidential information and trade secrets. Prospective franchisees should understand that breaching the confidentiality agreement can lead to significant legal and financial repercussions, as well as an extended period of restrictions on their business activities. The franchisor's ability to pursue multiple remedies simultaneously highlights the seriousness with which they view such violations.