What does the Chocolate Fish Coffee franchisee represent regarding agreements and covenants?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall develop, open and operate a Chocolate Fish Coffee business at the Location for the entire term of this Agreement.
- 2.2 Protected Territory. Chocolate Fish Franchising shall not establish, nor license the establishment of, another business within the Territory selling the same or similar goods or services under the same or similar trademarks or service marks as a Chocolate Fish Coffee business.
Chocolate Fish Franchising retains the right to:
(i) establish and license others to establish and operate Chocolate Fish Coffee businesses outside the Territory, notwithstanding their proximity to the Territory or their impact on the Business;
(ii) operate and license others to operate businesses anywhere that do not operate under the Chocolate Fish Coffee brand name; and
(iii) sell and license othersto sell products and services in the Territory through channels of distribution (including the internet) other than Chocolate Fish Coffee outlets.
2.3 Franchisee Control. Franchisee represents that it will identify each owner, officer and director of Franchisee, and describes the nature and extent of each owner's interest in Franchisee.
If any of this information changes, Franchisee shall notify Franchisor within 10 days.
- 2.5 Guaranty. If Franchisee is an entity, then Franchisee shall have each Owner sign a personal guaranty of Franchisee's obligations to Chocolate Fish Franchising, in the form of Attachment 3.
12.3 Infringement.
- (a) Defense of Franchisee. If Franchisee has used the Marks in accordance with this Agreement, then (i) Chocolate Fish Franchising shall defend Franchisee (at Chocolate Fish Franchising's expense) against any Action by a third-party alleging infringement by Franchisee's use of a Mark, and (ii) Chocolate Fish Franchising will indemnify Franchisee for expenses and damages if the Action is resolved unfavorably to Franchisee.
- (b) Infringement by Third Party. Franchisee shall promptly notify Chocolate Fish Franchising if Franchisee becomes aware of any possible infringement of a Mark by a third party. Chocolate Fish Franchising may, in its sole discretion, commence or join any claim against the infringing party.
- (c) Control. Chocolate Fish Franchising shall have the exclusive right to control any prosecution or defense of any Action related to possible infringement of or by the Marks.
- 12.4 Name. If Franchisee is an entity, it shall not use the words "Chocolate Fish Coffee" or any confusingly similar words in its legal name.
ARTICLE 13. COVENANTS
13.1 Confidential Information. With respect to all Confidential Information, Franchisee shall (a) adhere to all procedures prescribed by Chocolate Fish Franchising for maintaining confidentiality, (b) disclose such information to its employees only to the extent necessary for the operation of the Business; (c) not use any such information in any other business or in any manner not specifically authorized in writing by Chocolate Fish Franchising, (d) exercise the highest degree of diligence and effort to maintain the confidentiality of all such information during and after the term of this Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized disclosure or use of Confidential Information. Franchisee acknowledges that all Confidential Information is owned by Chocolate Fish Franchising (except
for Confidential Information which Chocolate Fish Franchising licenses from another person or entity). This Section will survive the termination or expiration of this Agreement indefinitely.
13.2 Covenants Not to Compete.
- (a) Restriction In Term. During the term of this Agreement, neither Franchisee, any Owner, nor any spouse of an Owner (the "Restricted Parties") shall directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor.
- (b) Restriction Post Term. For two years after this Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer), no Restricted Party shall directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor within five miles of Franchisee's Territory or the territory of any other Chocolate Fish Coffee business operating on the date of termination or transfer, as applicable. If this Agreement is terminated before the Territory is determined, then the area of non-competition will the Development Area and the territory of any other Chocolate Fish Coffee business operating on the date of termination.
Franchisee shall pay all taxes when due.
If Franchisee borrows money, it shall comply with the terms of its loan and make all loan payments when due.
If Franchisee leases the Location, Franchisee shall comply with its lease for the Location and make all rent payments when due.
7.17 Public Relations. Franchisee shall not make any public statements (including giving interviews or issuing press releases) regarding Chocolate Fish Coffee, the Business, or any particular incident or occurrence related to the Business, without Chocolate Fish Franchising's prior written approval, which will not be unreasonably withheld.
7.18 Association with Causes. Franchisee shall not in the name of the Business (i) donate money, products, or services to any charitable, political, religious, or other organization, or (ii) act in support of any such organization, without Chocolate Fish Franchising's prior written approval, which will not be unreasonably withheld.
7.19 No Other Activity Associated with the Business. Franchisee shall not engage in any business or other activity at the Location other than operation of the Chocolate Fish Coffee Business.
Franchisee shall not use assets of the Business for any purpose other than the Business.
If Franchisee is an entity, the entity shall not own or operate any other business except Chocolate Fish Coffee businesses.
- 7.21 Identification. Franchisee must identify itself as the independent owner of the Business in the manner prescribed by Chocolate Fish Franchising.
Franchisee must display at the Business signage prescribed by Chocolate Fish Franchising identifying the Location as an independently owned franchise.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, the Chocolate Fish Coffee franchisee makes several representations and agreements regarding the operation of their franchise. The franchisee must develop, open, and operate a Chocolate Fish Coffee business at the designated location for the entire term of the Franchise Agreement. The franchisee also represents that they will identify each owner, officer, and director of the franchise and describe the nature and extent of each owner's interest, notifying Chocolate Fish Coffee of any changes within 10 days. If the franchisee is an entity, each owner must sign a personal guaranty of the franchisee's obligations to Chocolate Fish Coffee.
The franchisee also agrees to protect Chocolate Fish Coffee's confidential information, adhering to prescribed procedures, disclosing it only to employees as necessary, and preventing unauthorized use or disclosure. During the term of the agreement, the franchisee, any owner, or their spouse cannot have any interest in or be employed by any competitor. For two years after the agreement expires or terminates, this restriction extends to within five miles of the franchisee's territory or any other Chocolate Fish Coffee business.
Furthermore, Chocolate Fish Coffee retains certain rights, including establishing and licensing other businesses outside the franchisee's territory, operating businesses under different brand names, and selling products and services through other distribution channels, even within the franchisee's territory. The franchisee must also comply with various operational requirements, such as paying taxes and loan payments when due, complying with lease terms, and obtaining Chocolate Fish Coffee's approval for public statements or associations with causes. The franchisee must operate only the Chocolate Fish Coffee business at the location and identify themselves as an independent owner of the franchise.