For City Publications, when must the franchisee ensure that shareholders, officers, partners, members, and managers execute a nondisclosure and confidentiality agreement?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee's shareholders, officers, partners, members and managers may be required to execute nondisclosure and confidentiality agreements. Franchisee may be obligated to ensure that each of the foregoing persons execute a nondisclosure and confidentiality agreement at the time this Agreement is executed or prior to such persons becoming shareholders, officers, partners, members or managers, whichever is earlier. Franchisor shall be a third party beneficiary with the right to enforce covenants contained in such agreements. The spouse of each person identified as Franchisee under the terms of this Agreement will be required to sign a nondisclosure and non-competition agreement.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, if the franchisee is a business entity, its shareholders, officers, partners, members, and managers may be required to sign nondisclosure and confidentiality agreements. The franchisee is obligated to ensure these individuals execute the agreement either when the Franchise Agreement is executed or before they become shareholders, officers, partners, members, or managers—whichever event occurs first.
This requirement ensures that all individuals in leadership positions within the franchisee's organization are legally bound to protect City Publications' confidential information. This is a common practice in franchising to safeguard trade secrets and proprietary information.
City Publications is identified as a third-party beneficiary, granting them the right to enforce the covenants within these agreements. Additionally, the spouse of each person identified as the franchisee must sign a nondisclosure and non-competition agreement, further protecting City Publications' interests.