What happens if a Coffee News franchisee's employee violates the non-compete agreement?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
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, Coffee News franchisees must ensure that their employees, officers, key personnel, agents, or stockholders sign a non-disclosure or confidentiality agreement. This agreement legally binds them to the contractual provisions that protect Coffee News's confidential information, trade secrets, and operational methods.
If an employee violates this non-disclosure agreement, the franchisee is responsible. The franchisee will be liable for damages, reasonable attorney fees, and court costs if Coffee News has to take legal action to enforce their contractual rights. This means that the franchisee, not the employee directly, is held financially accountable to Coffee News for the employee's breach.
This requirement underscores the importance of thorough employee training and monitoring to ensure compliance with the Coffee News franchise agreement. Franchisees should implement robust internal controls and regularly review employee activities to mitigate the risk of breaches and potential legal liabilities. The franchisee's responsibility extends to covering legal expenses incurred by Coffee News in enforcing these agreements, highlighting the need for careful management and oversight of all personnel with access to confidential information.