After expiration or termination of a Cool Binz franchise, are the franchisor, its affiliates, and its franchisees allowed to solicit the franchisee's employees for employment?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
At the start of their employment, you must require, as consideration for employment, each of your Managing Owner, Designated Managers, sales and/or account management employees to sign non-disclosure and confidentiality agreements that we have specified or approved. Such agreements will prohibit disclosure, by the employee to any other person or legal entity, of any trade secrets, customer lists, or other information, knowledge, or know-how regarding the System or the operation of the COOL BINZ Business, which is deemed confidential and/or proprietary by us. Such employee non-disclosure and confidentiality agreements will, to the fullest extent permitted by applicable law, prevent employees from servicing or soliciting any of the customers of your Business, except in their capacities as employees of the COOL BINZ Business. We may require you to send us a copy of such agreements once fully signed.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
The 2025 Cool Binz Franchise Disclosure Document does not explicitly state whether the franchisor, its affiliates, or other franchisees are prohibited from soliciting a franchisee's employees after the expiration or termination of the franchise agreement. However, the document does state that the franchisee must require their Managing Owner, Designated Managers, sales, and/or account management employees to sign non-disclosure and confidentiality agreements that Cool Binz has specified or approved. These agreements prevent employees from disclosing trade secrets, customer lists, or other confidential information about the Cool Binz system. The agreements also prevent employees from servicing or soliciting any of the customers of the franchisee's business, except in their capacities as employees of the Cool Binz Business.
These non-disclosure and non-solicitation agreements are designed to protect Cool Binz's confidential information and customer relationships. While they directly address the franchisee's employees' actions, they do not explicitly prevent Cool Binz itself or its other franchisees from soliciting those employees after the franchise agreement ends. The absence of a direct prohibition in the franchise agreement could mean that Cool Binz and its franchisees might be able to solicit the former employees of a terminated or expired franchise, provided they do not violate the terms of the non-disclosure and confidentiality agreements that the employees signed.
Prospective franchisees should seek clarification from Cool Binz regarding their policy on soliciting former employees of franchisees after the termination or expiration of the franchise agreement. Understanding this policy is crucial for workforce planning and ensuring the stability of their business operations. Franchisees should also consult with legal counsel to fully understand the implications of the non-disclosure and non-solicitation agreements and how they apply in the context of potential employee recruitment by the franchisor or other franchisees.