Does the restriction on furnishing confidential information about Coffee News survive the transfer 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 Coffee News's 2025 Franchise Disclosure Document, the restrictions on furnishing confidential information about the Coffee News format, methods of operation, advertising, promotion, ideas, or any other information relating 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 transferred to a new owner, the original franchisee remains obligated to protect the confidential information of Coffee News.
This provision is designed to protect Coffee News's proprietary information and trade secrets, which are essential to its business model. By ensuring that these restrictions survive the transfer of the Franchise Agreement, Coffee News aims to prevent former franchisees from using confidential information to compete with the brand or to benefit other businesses. This is a common practice in franchising, as franchisors need to safeguard their intellectual property and business methods.
For a prospective Coffee News franchisee, this clause highlights the importance of understanding and adhering to the confidentiality obligations outlined in the Franchise Agreement. Franchisees must also ensure that their employees, officers, key personnel, agents, or stockholders execute a non-disclosure or confidentiality agreement, binding them to these same restrictions. Failure to comply with these provisions can result in liability for damages, reasonable attorney fees, and court costs if Coffee News has to enforce its contractual rights through legal action.