What is the duration of the non-diversion agreement for a Cinch I.T. trainee after termination of employment?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
Except to the extent prohibited by the laws of the state where the Franchised Business is located or where the Trainee lives or works, in further consideration for the disclosure to Trainee of Franchisor's Trade Secrets and to protect the uniqueness of CINCH I.T.
SYSTEM, Trainee agrees that for two (2) years following the termination of Trainee's employment with Franchisee, Trainee will not without the prior written consent of Franchisor, divert or attempt to divert, directly or indirectly, any business, business opportunity or client of Franchisee's Franchised Business(s) to any competitor.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, a trainee is subject to a non-diversion agreement for two years following the termination of their employment with the franchisee. This agreement stipulates that the trainee cannot, without prior written consent from Cinch I.T., attempt to divert any business, business opportunity, or client from the franchisee's franchised business to any competitor. This restriction is in place to protect the uniqueness of the Cinch I.T. system and in consideration for the disclosure of Cinch I.T.'s trade secrets to the trainee. However, this is only applicable to the extent it is not prohibited by the laws of the state where the franchised business is located or where the trainee lives or works.
This non-diversion agreement is designed to safeguard Cinch I.T.'s interests by preventing former trainees from leveraging their knowledge of the franchised business to benefit competing entities. The two-year duration is intended to provide a reasonable period for Cinch I.T. to maintain its competitive edge and protect its established client base. The agreement specifically targets the diversion of business opportunities and clients, which are critical assets for any franchise.
Prospective franchisees should be aware of this provision, as it impacts the hiring and training of employees. Franchisees must ensure that trainees understand and agree to these terms as part of their employment. It is also important to note the clause regarding state laws, which suggests that the enforceability of this agreement may vary depending on the jurisdiction. Franchisees should seek legal counsel to ensure compliance with local regulations and to understand the specific implications of this agreement in their area.
In summary, the two-year non-diversion agreement for Cinch I.T. trainees is a significant measure to protect the franchise system's trade secrets and business interests. Franchisees must be diligent in implementing and enforcing this agreement, while also being mindful of any applicable state laws that may affect its enforceability.