Does the non-disparagement clause in the Christian Brothers Automotive agreement apply to the Franchisor's employees?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
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
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
Based on the 2025 Christian Brothers Automotive Franchise Agreement, the document outlines confidentiality obligations for the franchisee and their employees. Specifically, the franchisee is responsible for ensuring their employees keep confidential information secure.
The agreement states that franchisees may disclose confidential information required for business operations to their employees. To maintain confidentiality, franchisees must ensure their employees retain this information securely. Christian Brothers Automotive may require franchisees to have their employees sign a non-disclosure and non-competition agreement.
If required by Christian Brothers Automotive, this agreement must be executed when employment or training starts and comply with state law. The non-disclosure agreement will identify Christian Brothers Automotive as a third-party beneficiary with the right to enforce it, and franchisees must provide copies of these agreements to Christian Brothers Automotive within ten days of execution. While the FDD excerpt discusses non-disclosure agreements for the franchisee's employees, it does not explicitly state whether a non-disparagement clause applies to Christian Brothers Automotive's own employees. Further clarification should be sought from the franchisor on this matter.