What specific contractual provisions must be included in the non-competition agreement that a Coffee News franchisee executes with their employees?

According to the 2025 Coffee News Franchise Disclosure Document, a franchisee must ensure that their employees, officers, key personnel, agents, or stockholders are bound by the contractual provisions outlined in paragraph 8.5 regarding non-competition. These individuals must agree not to perform services for, engage in, or have any interest in any publication similar to Coffee News within the franchisee's region, either directly or indirectly, during the term of the agreement and for two years after its termination, expiration, transfer, or assignment.

This non-competition agreement is crucial for protecting Coffee News's market and confidential information. By requiring employees to sign such an agreement, the franchisee aims to prevent them from using their knowledge and experience gained at Coffee News to benefit a competing publication. This measure helps maintain the integrity of the Coffee News brand and business model within the specified geographic area.

The FDD specifies that employees who violate these provisions will be liable for damages caused by the violation, as well as reasonable attorney fees and court costs if Coffee News or the franchisee has to take legal action to enforce these rights. This provision serves as a deterrent against potential breaches of the non-competition agreement and provides a legal recourse for Coffee News and its franchisees in case of violations.

It is important for prospective Coffee News franchisees to understand the scope and implications of this non-competition requirement. They should consult with legal counsel to ensure that the non-competition agreements they use with their employees are enforceable and compliant with applicable laws. Additionally, franchisees should clearly communicate the terms of the non-competition agreement to their employees to avoid any misunderstandings or disputes in the future.