When operating a Coffee News franchise, can I require a non-disclosure agreement of trade secrets from my employees?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
. Only signatories to the Franchise Agreement are required to complete the training.
As the owner of the franchise(s), you are responsible for the compliance of all employees with the terms and conditions of the Franchise Agreement including your manager, on- premises supervisor or minority stockholder, if a company. If the franchisee is a company, there is no minimum equity interest required that the on-premises supervisor must have in the company. We do not impose any restriction that you must place on your managerial staff. You may, however, require a non-compete of all employees and a non-disclosure of trade secrets.
We place no other limitations or restrictions on your staff other than those contained in the Item 17. We do not require a personal guaranty of the performance.
ITEM 16
RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL
The only thing that you will sell is advertising space in the Periodical and we do not restrict the advertisements you may accept for publication.
We reserve the right to sell all Coffee News products and promotional items to our publishers and do not require that you purchase any of these items from us. We do restrict you from reselling any of the Coffee News products or promotional items you purchase, either from us or other vendors, to other publishers or the public. You are free to purchase any Coffee News products or promotional items and provide them free of charge to other publishers or the public, if you wish. You do not have the right to make any modification to the items from us.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 24–25)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, franchisees have the option to require a non-disclosure agreement of trade secrets from their employees. While Coffee News does not mandate specific restrictions on managerial staff, franchisees are permitted to implement non-compete agreements and non-disclosure agreements to protect trade secrets. As the owner, you are responsible for ensuring that all employees comply with the terms and conditions outlined in the Franchise Agreement.
Specifically, the Franchise Agreement states that franchisees must execute a non-disclosure or confidentiality agreement with their employees, officers, key personnel, agents, or stockholders. This agreement ensures that these individuals are bound by the contractual provisions related to confidential information about the Coffee News format, methods of operation, advertising, promotion, ideas, or any other information related to Coffee News's business.
If an employee breaches the non-disclosure agreement, the franchisee can hold them liable for damages, reasonable attorney fees, and court costs if Coffee News has to enforce their contractual rights through legal action. This provision survives the termination, expiration, transfer, or assignment of the Franchise Agreement, providing ongoing protection for Coffee News's trade secrets.