Does the restriction on furnishing confidential information about Coffee News survive the assignment of the Franchise 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 Franchise Disclosure Document, the restrictions on disclosing confidential information about the Coffee News format, methods, advertising, promotion, ideas, or any other information related to Coffee News's business survive the termination, expiration, transfer, or assignment of the Franchise Agreement. This means that even if a Coffee News franchise is sold or transferred to a new owner, the original franchisee remains obligated to keep confidential information private.
This obligation extends to the franchisee's employees, officers, key personnel, agents, or stockholders, who must also sign a non-disclosure or confidentiality agreement. These individuals are bound by the same confidentiality provisions as the franchisee. If Coffee News has to take legal action to enforce these confidentiality agreements, the franchisee may be liable for damages, reasonable attorney fees, and court costs.
For a prospective Coffee News franchisee, this clause highlights the importance of maintaining the confidentiality of Coffee News's proprietary information, not only during the term of the franchise agreement but also after any transfer or assignment. It also emphasizes the need to ensure that all individuals associated with the franchise are aware of and comply with these confidentiality obligations, as the franchisee can be held liable for their breaches.