Does the non-disparagement clause in the Christian Brothers Automotive agreement apply to communications with suppliers?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
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, Section 16.02(a) of the franchise agreement states that franchisees cannot "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".
This clause indicates that franchisees are prohibited from taking actions that could harm the relationship between Christian Brothers Automotive and its vendors. This includes attempting to persuade vendors to work with competitors or engaging in any behavior that could damage the goodwill associated with the Christian Brothers Automotive brand and system. The restriction extends to both present and prospective vendors, meaning franchisees must avoid any actions that could negatively impact current vendor relationships or discourage potential vendors from partnering with Christian Brothers Automotive.
In practical terms, a Christian Brothers Automotive franchisee needs to be cautious in their communications and interactions with suppliers. They should avoid making disparaging remarks about the franchise system or attempting to influence suppliers to favor other businesses. This is to protect the brand's reputation and maintain positive relationships with its suppliers. This clause aims to ensure that franchisees act in the best interest of the entire Christian Brothers Automotive network, rather than pursuing individual gains that could be detrimental to the system as a whole.