Does the non-disparagement clause in the Christian Brothers Automotive agreement apply to communications with clients?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
16.01 Best Efforts. During the term of this Agreement, Franchisee covenants and agrees to expend its best efforts in the operation of the Franchised Business, and shall not engage in any directly or indirectly conflicting or competing enterprises or any other activities which would be detrimental to or interfere with the operation, reputation or goodwill of the Franchised Business, the Franchisor, the System or any other of Franchisor's franchisees.
16.02 Exclusive Relationship; During the Agreement Term. Franchisee specifically acknowledges that, pursuant to this Agreement, Franchisee will receive valuable, specialized training and Confidential Information, including information regarding the operational, sales, promotional, and marketing methods and techniques of Franchisor and the System. Franchisee covenants that during the term of this Agreement, except as otherwise approved in writing by Franchisor, Franchisee shall not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, partnership, joint venture, organization or legal entity:
(a) Divert or attempt to divert any present or prospective vendor or Customer of any Christian Brothers Automotive branded business or franchise to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System;
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
Based on the 2025 Christian Brothers Automotive Franchise Disclosure Document, franchisees are obligated to protect the brand's reputation and goodwill. During the term of the agreement, franchisees must expend their best efforts in operating the franchised business and are prohibited from engaging in activities detrimental to the operation, reputation, or goodwill of the franchised business, the franchisor, the System, or any other of Christian Brothers Automotive's franchisees.
Specifically, franchisees are prohibited from diverting or attempting to divert any present or prospective vendor or customer of any Christian Brothers Automotive branded business to any competitor. They cannot perform any act injurious or prejudicial to the goodwill associated with the Marks and the System. This suggests that negative communications with clients that could harm the brand's reputation would be a violation of the agreement.
While the FDD excerpts do not explicitly use the term "non-disparagement clause," the restrictions on franchisee behavior and the protection of goodwill function similarly. Franchisees should seek clarification from Christian Brothers Automotive regarding the specific scope of these restrictions and how they apply to communications with clients to ensure compliance with the franchise agreement.