What is the dependency between a Restricted Person undertaking their role and the execution of the Confidentiality and Non-Competition Agreement for a Craters & Freighters franchise?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must ensure and require that all of Franchisee's owners, officers, directors, shareholders, and partners (each a "Restricted Person" and, collectively, "Restricted Persons") execute a prescribed form of confidentiality and non-competition agreement that will be in substantially the same form attached to this Agreement as Attachment F ("Confidentiality and Non-Competition Agreement").
Franchisee must obtain a signed copy of the Confidentiality and Non-Competition Agreement from every such Restricted Person prior to, or at the same time of, that Restricted Person undertaking its role with Franchisee.
Franchisee's spouse or significant other will also be bound by the same requirement and will sign the same Confidentiality and Non-Competition Agreement.
Franchisee must provide Franchisor with a copy of each signed Confidentiality and Non-Competition Agreement within ten (10) days of executing such Confidentiality and Non-Competition Agreement.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, a critical requirement for operating a franchise is ensuring that all 'Restricted Persons' associated with the franchisee sign a Confidentiality and Non-Competition Agreement. Restricted Persons include the franchisee's owners, officers, directors, shareholders, and partners, as well as the franchisee’s spouse or significant other. This agreement is designed to protect Craters & Freighters' confidential information and trade secrets.
The FDD stipulates that the franchisee must obtain a signed copy of this agreement from every Restricted Person before or at the same time as they begin their role with the franchisee. This requirement highlights the importance Craters & Freighters places on safeguarding its proprietary information and preventing unfair competition. The franchisee is also obligated to provide Craters & Freighters with a copy of each signed agreement within ten days of its execution.
These obligations extend beyond the initial term of the agreement. The confidentiality clauses remain in effect during the agreement's term and perpetually after its termination, expiration, or non-renewal. This ensures ongoing protection of Craters & Freighters' sensitive information, even after the franchise relationship ends. The agreement also includes in-term and post-term competition restrictions, further protecting Craters & Freighters' market position.
Moreover, the Restricted Person acknowledges that they will gain access to confidential information and trade secrets vital to Craters & Freighters' success. By signing the agreement, they recognize the reasonableness of the restrictions and agree to avoid actions that could damage the Craters & Freighters system through disclosure, misappropriation, or unfair competition. This proactive measure aims to mitigate potential risks associated with the handling of sensitive business information.