Under what condition is the Cinnaholic Developer required to cause its employees to execute a noncompetition, nonsolicitation, and/or nondisclosure agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.5. Agreements by Other Third Parties. As a condition to Franchisor's execution of this Agreement, Developer, if requested by Franchisor, shall cause each of its management and supervisory employees and other employees to whom disclosures of confidential information are made to execute a noncompetition, nonsolicitation and/or nondisclosure agreement in the form(s) prescribed by Franchisor from time to time.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the Developer (franchisee) is required to have certain employees sign noncompetition, nonsolicitation, and/or nondisclosure agreements if Cinnaholic requests it. Specifically, if Cinnaholic asks, the Developer must ensure that its management, supervisory, and other employees who have access to confidential information execute these agreements. The specific form of these agreements will be determined by Cinnaholic.
This requirement protects Cinnaholic's interests by preventing key employees of the franchise from using confidential information to compete with the franchise or solicit its customers or employees. It is a fairly standard practice in franchising, especially when dealing with proprietary business methods or trade secrets.
For a prospective Cinnaholic franchisee, this means being prepared to implement such agreements with relevant employees if requested by Cinnaholic. The franchisee should factor in the administrative burden and potential legal costs associated with implementing and enforcing these agreements. It would be prudent to review sample agreement forms with legal counsel to understand the scope and enforceability of these provisions within the relevant jurisdiction.