Is a Cinch I.T. trainee allowed to make loans to a business similar to Cinch I.T. during their employment?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
sor, upon request, or upon termination of employment by Franchisee, or upon conclusion of the use for which the CINCH I.T. Operations Manual or other information or material may have been furnished to Trainee.
-
- Trainee shall not, directly or indirectly, do any act or omit to do any act, which would or would likely to be injurious or prejudicial to the goodwill associated with CINCH I.T. SYSTEM.
-
- 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;
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, a trainee is generally prohibited from making loans to businesses similar to Cinch I.T. during their employment. Specifically, trainees are restricted from engaging in or acquiring any financial interest in, advising, helping, or making loans to any entity involved in a business that is the same as or similar to that conducted by Cinch I.T. within the United States. This restriction is put in place to protect the goodwill, unique qualities, and trade secrets of the Cinch I.T. system.
However, this restriction is not absolute. The prohibition does not apply to the extent that it is prohibited by the laws of the state where the franchised business is located or where the trainee lives or works. This means that if state law allows such activities, the trainee may not be bound by this restriction.
This clause is part of a broader agreement where the trainee agrees to protect the confidentiality and value of Cinch I.T.'s trade secrets in exchange for the disclosure of those trade secrets. The franchisee is also responsible for ensuring that the trainee complies with these requirements. A breach of this agreement by the trainee could cause irreparable injury to Cinch I.T., according to the FDD.