For how long after the Coffee News agreement terminates is the franchisee subject to a non-competition clause?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
" name or Format or attack the validity of this license of the use of such name or Format or do anything which would jeopardize or diminish Franchisor's rights to or the value of such name.
- 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.
- 6.3. Copyrights. All title, including without limitation copyrights, in and to the Periodical, Operations Manual, Coffee News College training materials, marketing promotion materials, our license agreements, and all content that Licensor and/or its affiliate develop, either in hardcopy or digital format, and any copies thereof are owned by Franchisor and/or its affiliate.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
Based on the 2025 Coffee News Franchise Disclosure Document, the agreement includes certain restrictions that continue even after the franchise agreement ends. Specifically, franchisees are prohibited from disclosing confidential information related to the Coffee News format, operational methods, advertising, promotional strategies, and other business-related information without the franchisor's written consent. This obligation extends beyond the termination, expiration, transfer, or assignment of the Franchise Agreement.
This means that even after a franchisee leaves the Coffee News system, they are legally bound to protect the brand's trade secrets and confidential information. This is a standard practice in franchising to safeguard the franchisor's proprietary information and maintain a competitive advantage. Franchisees must also ensure that their employees and key personnel sign non-disclosure or confidentiality agreements to uphold these protections.
The FDD also states that if any part of the restrictive covenants within the agreement is deemed unreasonable or against public policy, it can be adjusted regarding time and region. This ensures that the non-compete terms are fair and enforceable, allowing a court to modify the restrictions if necessary to make them reasonable. While the document specifies that the parties do not intend for a court to modify the payment terms, it does allow for adjustments to the non-compete agreement, indicating a willingness to ensure the terms are balanced and legally sound.
Prospective Coffee News franchisees should carefully review these post-termination obligations and understand the scope of the non-disclosure requirements. It is advisable to seek legal counsel to fully comprehend the implications of these clauses and how they might affect future business endeavors after leaving the Coffee News franchise system.