How can the Creative Colors employee agreement be changed?
Creative_Colors Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. A sample template Employment Contract is found in the Confidential Manuals. Franchisee acknowledges that the sample template Employment Contract may not be enforceable in the state where Franchisee's employees are located, and for that reason, Franchisee assumes responsibility for having said Employment Contract reviewed by an attorney who will advise Franchisee as to the applicable state law and make appropriate revisions to the restrictive covenants. Notwithstanding the sentence immediately preceding, Franchisee may not modify Paragraph 21 of the Employment Contract, which provides that the Franchisor is an intended third-party beneficiary of that agreement. Franchisee hereby indemnifies and holds Franchisor harmless from any claim, losses, damages, or causes of action arising out of the use by Franchisee of the sample template Employment Contract, if any provision (other than paragraph 21 referred to above) is found to be unenforceable.
Source: Item 23 — RECEIPT (FDD pages 69–217)
What This Means (2025 FDD)
According to the 2025 Creative Colors Franchise Disclosure Document, franchisees are generally responsible for ensuring their employee contracts comply with state law and may need to revise the restrictive covenants accordingly. However, franchisees are specifically prohibited from modifying Paragraph 21 of the employment contract, which designates Creative Colors International, Inc. as a third-party beneficiary. Franchisees must have their employment contracts reviewed by an attorney to ensure compliance with applicable state laws and to make necessary revisions to the restrictive covenants, except for Paragraph 21.
Creative Colors provides a sample template Employment Contract in its Confidential Manuals. Franchisees bear the responsibility of having this template reviewed by an attorney who will advise on applicable state law and revise the restrictive covenants as needed. This ensures that the employment contracts are enforceable in the specific state where the franchisee's employees are located.
If a franchisee uses the sample template Employment Contract and any provision (other than paragraph 21) is found to be unenforceable, the franchisee agrees to indemnify and hold Creative Colors harmless from any resulting claims, losses, damages, or causes of action. This means the franchisee is responsible for any legal repercussions arising from the unenforceable provisions, emphasizing the importance of legal review and customization of the employment contract.