Can Cinnaholic require employees who receive confidential information to sign a noncompetition agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
anges in any item in which we claim common law copyright or registered copyright protection including the Operations Manual. You must adopt and use all additions, deletions, and changes as we direct, at your expense.
Your spouse, and if you are not an individual, your shareholders, members, partners and managers, as applicable, and their spouses, must sign the Personal Covenants attached to the Franchise Agreement as Exhibit B and the Development Agreement as Exhibit C requiring them to comply with the confidentiality provisions of the Franchise Agreement and the Development Agreement, refrain from engaging in competitive businesses, and refrain from soliciting our employees and the employees of other CINNAHOLIC® franchisees. We have the right to require your other employees who have access to our confidential information to sign a noncompetition, non-solicitation and/or nondisclosure agreement in the form(s) prescribed by us periodically. We have the right to take legal action against you if there has been an unauthorized use of our confidential information or trade secrets through you or your employees.
There is currently no litigation pending involving the copyrighted materials or confidential information. We do not know of any effective material determinations of the U.S. Copyright Office or any court regarding any of the copyrighted materials or confidential information. There are no agreements in effect that significantly limit our right to use or license the copyrighted materials or confidential information.
We do not know of any superior rights or infringing uses that could materially affect your use of our confidential information of copyright materials.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 41)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic has the right to require certain individuals to sign noncompetition, non-solicitation, and/or nondisclosure agreements. Specifically, Cinnaholic can require a franchisee's spouse (and the spouses of shareholders, members, partners, and managers if the franchisee is not an individual) to sign a Personal Covenants agreement, which includes clauses related to confidentiality, non-competition, and non-solicitation.
Furthermore, Cinnaholic retains the right to mandate that other employees of the franchisee who have access to Cinnaholic's confidential information also sign a noncompetition, non-solicitation, and/or nondisclosure agreement. The specific form of these agreements will be determined and prescribed by Cinnaholic periodically. This measure is in place to protect Cinnaholic's confidential information and trade secrets, and Cinnaholic reserves the right to take legal action against franchisees or their employees if there is unauthorized use of this information.
In addition to employees, Cinnaholic may also require the franchisee's managers to sign a noncompetition, non-solicitation, and/or nondisclosure agreement if they are not already bound by the Franchise Agreement. These agreements prevent managers from engaging in activities that compete with the franchisee's Cinnaholic bakery or any other Cinnaholic bakery, disclosing confidential information, and soliciting employees of Cinnaholic or its franchisees. This ensures that those in key management positions are legally obligated to protect Cinnaholic's interests.
These stipulations are designed to protect Cinnaholic's proprietary information and maintain a competitive advantage. It is common practice in franchising to have such agreements in place to safeguard trade secrets and prevent unfair competition. Prospective franchisees should carefully review the specific terms of these agreements and understand their obligations regarding confidentiality, non-competition, and non-solicitation.