Can Cinnaholic require my other employees to sign a noncompetition, non-solicitation and/or nondisclosure agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 39–40)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic has the right to require your employees to sign noncompetition, non-solicitation, and/or nondisclosure agreements. These agreements would be in a form that Cinnaholic prescribes periodically. This requirement is in place to protect Cinnaholic's confidential information and trade secrets. Cinnaholic also has the right to take legal action against you if there is unauthorized use of their confidential information or trade secrets by you or your employees.
This means that as a Cinnaholic franchisee, you must ensure that your employees who have access to Cinnaholic's confidential information sign the required agreements. These agreements are designed to prevent employees from competing with Cinnaholic, soliciting Cinnaholic's employees or other franchisees' employees, or disclosing confidential information. The specific terms of these agreements, and the employees to whom they apply, are determined by Cinnaholic.
It is common practice in franchising to have employees sign agreements to protect trade secrets and prevent unfair competition. These agreements help maintain the integrity of the franchise system and protect the franchisor's brand and proprietary information. Franchisees should be aware of these requirements and ensure compliance to avoid potential legal issues with the franchisor.
Prospective franchisees should carefully review the specific terms of the noncompetition, non-solicitation, and nondisclosure agreements that Cinnaholic requires its franchisees' employees to sign. Understanding these obligations is crucial for managing employees and protecting Cinnaholic's confidential information.