What happens if a Coffee News franchisee fails to execute a non-disclosure agreement with its employees?
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, a franchisee is required to have its employees, officers, key personnel, agents, or stockholders sign a non-disclosure or confidentiality agreement. This agreement ensures they are bound by the contractual provisions that protect Coffee News's confidential information. These provisions survive the termination, expiration, transfer, or assignment of the Franchise Agreement.
If a Coffee News franchisee fails to ensure these parties sign a non-disclosure agreement, and confidential information is disclosed, the franchisee will be liable for damages. The franchisee will also be responsible for reasonable attorney fees and court costs if Coffee News has to take legal action to enforce its contractual rights.
This requirement is in place to protect Coffee News's trade secrets, which include the Coffee News format, methods of operation, advertising, promotion, ideas, and any other information related to the Coffee News business. By requiring these agreements, Coffee News aims to prevent the unauthorized dissemination of sensitive information that could harm its competitive advantage and the integrity of the franchise system.