Can family members of a Coffee News franchisee be involved in a competing publication during the non-competition period?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of this Agreement and for a period of two (2) Years after the termination, expiration, transfer, or assignment of this Agreement, Franchisee, either as individuals or a business entity, their family members or the officers, directors, other key personnel, employees or stockholders, as the case may be, shall not directly or indirectly, through corporations, partnerships, trusts, associations, joint ventures, or unincorporated businesses, perform any services for, engage in or acquire, be an employee of, have any financial, beneficial, or equitable interest in, or have any interest whatsoever in any publication of a type similar to the Periodical that operates within the region covered by this agreement .
Franchisee shall execute a non-competition agreement with its employees, officers, key personnel, agents, or stockholders, as the case may be, that such employees, officers, key personnel, agents, or stockholders, as the case may be, shall be bound by the contractual provisions contained in this paragraph, and will be liable for damages caused by violation of the provision contained herein plus reasonable attorney fees and court cost if the Franchisor and/or Franchisee has to enforce their contractual rights by legal actions.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, during the term of the agreement and for two years after termination, expiration, transfer, or assignment, neither the franchisee nor their family members can be involved in a similar publication operating within the region covered by the agreement. This restriction applies whether the involvement is direct or indirect, and includes acting as an employee, officer, director, key personnel, or stockholder of such a publication.
This non-compete clause extends to the franchisee's family members, officers, directors, key personnel, employees, or stockholders. These individuals are prohibited from providing services to, engaging in, acquiring interest in, or having any association with a similar publication within the franchisee's territory. This provision aims to protect Coffee News' market share and confidential information by preventing those closely associated with the franchisee from leveraging their knowledge to benefit a competing business.
For a prospective Coffee News franchisee, this means that their immediate family and key business associates must also refrain from any involvement with competing publications during and for two years after the franchise agreement. Franchisees should ensure that their family members and associates understand and comply with this restriction to avoid potential legal issues and financial liabilities. Franchisees are also required to have their employees, officers, key personnel, agents, or stockholders sign a non-competition agreement to ensure they are bound by these provisions.