Does the non-disparagement clause in the Christian Brothers Automotive agreement apply to communications with other franchisees?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
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Franchisee's employees are not employees of Franchisor or its affiliates.
Franchise Agreement (Ver 04-14-2025)
Franchisee: ___________
Franchisor: Christian Brothers Automotive Corporation
7. CONFIDENTIAL INFORMATION.
7.01 Non-Use and Non-Disclosure of Confidential Information. Except as otherwise stated herein, Franchisee shall not, during the term of this Agreement or at any time thereafter, communicate, divulge or use for the benefit of any other person, persons, partnership, association, corporation or entity the Confidential Operations Manual, any information, knowledge or Know-How concerning the systems of operation, products, services, procedures, policies, standards, criteria or Customers, Customer Information, Data and/or any other information which Franchisor designates in other sections of this Agreement or elsewhere as confidential (collectively "Confidential Information"). Franchisee may disclose Confidential Information that is required for the operation of the Franchised Business to its employees who must have access to it in order to perform their job duties for the operation of the Franchised Business. Franchisee shall take such precautions to ensure that its employees retain such information in confidence, including when Franchisor deems it appropriate, the execution by each such employee of a nondisclosure and noncompetition agreement provided by Franchisor (the "Nondisclosure Agreement"). If required by Franchisor, the Nondisclosure Agreement must (a) be executed at the earlier of the commencement of employment or the commencement of training of the respective employee, and (b) comply with the law of the state where the Franchised Business is located including without limitation all requirements pertaining to the validity and enforceability of the Nondisclosure Agreement. The Nondisclosure Agreement will be in a form prescribed by Franchisor and will include, without limitation, specific identification of Franchisor as a third-party beneficiary of the Nondisclosure Agreement with the
Franchise Agreement (Ver 04-14-2025) Franchisee: ___________
Franchisor: Christian Brothers Automotive Corporation
independent right to enforce it. Franchisee will submit copies of all such executed
Nondisclosure Agreements to Franchisor within ten (10) days of their execution.
- ADVERTISING AND MARKETING.
8.01 Advertising Standards. Franchisee will only use such advertising, identification and
promotional materials and programs (including, but not limited to, printed and broadcast
advertisements, stationery, business cards, press releases, signs, displays, leaflets,
newspaper inserts, promotional mail outs and promotional literature) which have been
furnished by Franchisor or been approved in advance by Franchisor in accordance with
Section 8.04.
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the information provided does not explicitly state whether the non-disparagement clause in the Christian Brothers Automotive agreement applies to communications with other franchisees. However, Section 7.01 addresses confidential information, stating that franchisees cannot communicate or divulge confidential information to any person, persons, partnership, association, corporation, or entity. This suggests that communications with other franchisees could be impacted if confidential information is involved.
Section 16.01 requires franchisees to expend their best efforts in operating the franchised business and not engage in activities detrimental to the franchisor, the system, or any other of Christian Brothers Automotive's franchisees. This could be interpreted to include refraining from disparaging remarks that harm the brand or other franchisees.
To fully understand the scope of the non-disparagement clause and its applicability to communications with other franchisees, a prospective franchisee should seek clarification from Christian Brothers Automotive. Specifically, they should inquire about what constitutes disparagement, whether internal communications among franchisees are protected, and what the potential consequences are for violating the clause.