What happens if a Coffee News franchisee's employee violates the non-competition 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 FDD, if a Coffee News franchisee's employee violates the non-disclosure or confidentiality agreement, the franchisee is responsible. The franchisee must ensure that employees, officers, key personnel, agents, or stockholders execute a non-disclosure or confidentiality agreement. This agreement binds them to the contractual provisions regarding confidential information related to the Coffee News format, methods of operation, advertising, promotion, ideas, or any other information related to the Coffee News business.
If the Coffee News franchisor has to take legal action to enforce these contractual rights due to a violation by the franchisee's personnel, the franchisee will be liable for damages, reasonable attorney fees, and court costs. This means that the franchisee bears the financial risk associated with ensuring their employees comply with the confidentiality and non-disclosure terms.
This requirement highlights the importance of thorough training and oversight of all personnel who have access to Coffee News's confidential information. Franchisees should implement robust internal policies and procedures to prevent unauthorized disclosure or use of trade secrets. The franchisee's responsibility extends to covering legal costs incurred by Coffee News if they have to enforce these agreements due to an employee's breach, making proactive management of confidentiality crucial for franchisees.