What agreement must a Closet Storage Concepts designated manager and all employees execute?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
behalf of the persons who are liable under Section 6.4.2 that each has previously worked or been gainfully employed in other fields and that the provisions of Section 6.4.2 in no way prevent any of these persons from earning a living. Spouses of Franchisees must sign the Confidentiality, Non-Disclosure and Non-Competition Agreement in the form attached as Exhibit "3(b)".
- 6.4.4 Employees. Franchisee shall require its officers, directors, equity owners, employees (to the extent the employee has received Franchisor's initial training) and members of the immediate family of Franchisee, its officers, directors and equity owners to execute a confidentiality agreement containing provisions similar to those set forth in this Agreement. Our current form of confidentiality agreement is attached to this Agreement as Exhibit "3(a) and 3(b)".
- 6.4.5 Publicly-Owned Entity. This Section 6.4 shall not apply to any ownership by Franchisee or any other person subject to Section 6.4 of a beneficial interest of less than 5% in the outstanding securities or partnership interests in any publicly-held entity.
- 6.5 Telephone. Franchisee shall obtain at its own expense a new telephone number and listing, to be listed under the Closet & Storage Concepts name and not under Franchisee's corporate, partnership, or individual name, to be used exclusively in connection with Franchisee's operation of the Franchised Business. Upon the expiration and nonrenewal, transfer or termination of this Agreement for any reason, Franchisee shall terminate its use of such telephone number and listing and assign same to Franchisor or its designee.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISED BUSINESS (FDD pages 43–44)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, franchisees must ensure that officers, directors, equity owners, and employees who receive initial training from Closet Storage Concepts, along with immediate family members of the franchisee, officers, directors, and equity owners, execute a confidentiality agreement. This agreement should contain provisions similar to those outlined in the franchise agreement. The current form of this confidentiality agreement is included as Exhibit "3(a) and 3(b)" to the Franchise Agreement.
Furthermore, Closet Storage Concepts requires franchisees to obtain a written agreement from their employees and anyone else who has access to the Operations Manual or confidential information. This agreement, in the form attached as Exhibit "3(a)", ensures that these individuals maintain the confidentiality of the information and recognize Closet Storage Concepts as a third-party beneficiary with the right to enforce the agreement. Spouses of franchisees must sign a separate Confidentiality, Non-Disclosure, and Non-Competition Agreement, which is attached as Exhibit "3(b)".
All executed agreements must be forwarded to Closet Storage Concepts. The franchisee is also responsible for retaining these confidentiality agreements with their business records for the period specified in the Operations Manual. Additionally, the franchisee must enforce all covenants within these agreements and notify Closet Storage Concepts of any breaches or suspected breaches that they are aware of. This comprehensive approach helps Closet Storage Concepts protect its trade secrets and confidential information across its franchise network.