Is a breach of the Confidentiality and Non-Competition Agreement by a Chatime manager considered a breach of the Franchise Agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (7) You agree to ensure that the Managing Owner, Operating Manager, and any other management personnel of Franchisee shall execute and deliver a Confidentiality and Non-Competition Agreement in the form attached as Exhibit 4.
At our request, you will submit to us a copy of all such written agreements.
You will ensure that each such person complies with the terms of such agreement during the period that he or she is employed by or associated with your Franchised Business.
Any breach of such agreement by any such person will be deemed a breach of this Agreement.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a breach of the Confidentiality and Non-Competition Agreement by a manager is considered a breach of the Franchise Agreement. Specifically, the franchisee must ensure that the Managing Owner, Operating Manager, and any other management personnel execute and deliver a Confidentiality and Non-Competition Agreement.
The agreement must be in the form attached as Exhibit 4 to the Franchise Agreement. The franchisee must also provide Chatime with a copy of all such written agreements upon request.
Furthermore, the franchisee is responsible for ensuring that each person complies with the terms of the agreement during their employment or association with the franchised business. Any failure to comply with the Confidentiality and Non-Competition Agreement by these individuals will be considered a breach of the Franchise Agreement itself, making it crucial for franchisees to enforce these agreements with their personnel.