Is a Coffee News franchisee required to have its stockholders 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 the 2025 Coffee News Franchise Disclosure Document, franchisees are required to ensure that certain parties associated with their franchise operation sign a non-disclosure or confidentiality agreement. This requirement extends to employees, officers, key personnel, agents, or stockholders of the Coffee News franchise.
The purpose of this agreement is to protect Coffee News's confidential information, including the "Coffee News" format, operational methods, advertising strategies, promotional ideas, and any other information related to the Coffee News business. By having these individuals sign a non-disclosure agreement, Coffee News aims to prevent the unauthorized dissemination of sensitive information that could harm its competitive advantage or proprietary interests.
The FDD specifies that these individuals will be bound by the contractual provisions outlined in the agreement. Furthermore, they will be held liable for damages, reasonable attorney fees, and court costs if Coffee News has to take legal action to enforce these contractual rights. This provision underscores the importance Coffee News places on safeguarding its trade secrets and confidential information and ensures that franchisees take responsibility for the actions of their associated parties.