Is a Coffee News franchisee required to have its key personnel sign a non-disclosure agreement?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.2 Use of Trade Secrets. Franchisee shall not directly or indirectly furnish to any other party any confidential information as to the "Coffee News" Format, methods of operation, advertising, promotion, ideas or any other information relating to Franchisor's business of "Coffee News" without the written consent of Franchisor. The provisions contained herein shall survive the termination, expiration, transfer, assignment, of this Agreement. Franchisee shall execute a non-disclosure or confidentiality 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, reasonable attorney fees and court cost if the Franchisor has to enforce their contractual rights by legal actions.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to Coffee News's 2025 Franchise Disclosure Document, franchisees are required to have their employees, officers, key personnel, agents, or stockholders sign a non-disclosure or confidentiality agreement. This agreement ensures that these individuals are bound by the same confidentiality provisions as the franchisee, specifically regarding the Coffee News format, methods of operation, advertising, promotion, ideas, and any other confidential information related to the Coffee News business.
This requirement is designed to protect Coffee News's trade secrets and confidential information. The agreement must stipulate that these individuals are bound by the contractual provisions outlined in the franchise agreement concerning confidential information. Furthermore, these individuals will be liable for damages, reasonable attorney fees, and court costs if Coffee News has to take legal action to enforce these confidentiality rights.
For a prospective Coffee News franchisee, this means that they must implement a formal non-disclosure agreement process for their staff and key stakeholders. This adds an administrative overhead to managing personnel but is crucial for maintaining the integrity and confidentiality of the Coffee News system. The franchisee is responsible for ensuring that these agreements are in place and enforceable, and they could face legal repercussions if their personnel breach confidentiality and Coffee News has to pursue legal action.
This requirement is fairly standard in franchising, particularly for systems that rely on proprietary information and operational methods. It ensures that the franchisor's intellectual property and business model are protected from unauthorized disclosure, which could harm the entire franchise system. Franchisees should factor in the cost and effort of implementing and enforcing these agreements when assessing the overall investment and operational requirements of a Coffee News franchise.