Does the restriction on furnishing confidential information about Coffee News survive the termination 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 obligation to protect confidential information extends beyond the termination of the Franchise Agreement. Franchisees are prohibited from directly or indirectly disclosing any confidential information regarding the Coffee News format, operational methods, advertising, promotional strategies, ideas, or any other business-related information without the franchisor's written consent. This restriction remains in effect even after the agreement expires, is terminated, transferred, or assigned.
This means that even after a franchisee leaves the Coffee News system, they are still legally bound to protect the brand's trade secrets and confidential information. This is a common practice in franchising to protect the franchisor's competitive advantage and proprietary information.
Furthermore, Coffee News requires franchisees to ensure that their employees, officers, key personnel, agents, or stockholders also adhere to these confidentiality obligations by executing a non-disclosure or confidentiality agreement. Franchisees are liable for damages, attorney fees, and court costs if Coffee News has to take legal action to enforce these confidentiality agreements. This highlights the importance of franchisees carefully managing and training their staff to prevent unauthorized disclosure of confidential information, even after their association with Coffee News ends.