Are there any exceptions to the non-disclosure, non-solicitation, and non-competition agreement required for Cinch I.T. training participants?
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 order to protect the goodwill and unique qualities of CINCH I.T.
SYSTEM and the confidentiality and value of Franchisor's Trade Secrets, and in consideration for the disclosure to Trainee of Franchisor's Trade Secrets, Trainee further undertakes and covenants that, during the time he is employed by Franchisee, he will not:
(a) Directly or indirectly, for himself or through, on behalf of or in conjunction with any person, partnership or business entity, engage in or acquire any financial or beneficial interest in (including interest in business entities, partnerships, trusts, unincorporated associations or joint ventures), advise, help or make loans to any entity involved in business which is the same as or similar to that conducted by CINCH I.T. which Business is, or is intended to be located, within the United States; or
(b) Divert or attempt to divert, directly or indirectly, any business, business opportunity or client of Franchisee's Business(s) to any competitor.
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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.
Franchisee undertakes to use Franchisee's best efforts to ensure that Trainee acts as required by this Agreement.
Trainee agrees that in the event of a breach of this Agreement, Franchisor would be irreparably injured and be without an adequate remedy at law.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, there are some exceptions to the non-disclosure, non-solicitation, and non-competition agreements for training participants, primarily related to legal restrictions and the scope of information shared. Specifically, these agreements are not enforced to the extent prohibited by the laws of the state where the franchised business is located or where the employee lives or works. This means that if a state's laws restrict the enforceability of such agreements, those restrictions will apply.
Additionally, the trainee is permitted to disclose Cinch I.T.'s trade secrets to other employees of the franchisee, but only to the extent necessary to train or assist those employees. This is conditional on those other employees also having signed similar non-disclosure, non-solicitation, and non-competition agreements or confidentiality agreements, as deemed appropriate by Cinch I.T. This exception allows for the necessary sharing of information within the franchisee's business for training and operational purposes, while still maintaining overall confidentiality and protection of trade secrets.
Furthermore, the franchisee can disclose the terms of the franchise agreement to their professional advisors and lenders without violating the confidentiality terms. Cinch I.T., however, retains the right to disclose the terms of the agreement as it deems necessary for its own interests or the interests of the franchise system. These exceptions provide some flexibility while ensuring the core proprietary information and competitive advantages of Cinch I.T. are protected.