What does the Non-Competition, Non-Disclosure, and Proprietary Rights Agreement for Crisp & Green protect?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
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IN WITNESS WHEREOF, the parties have executed this Addendum as of the date written
EXHIBIT D TO THE FRANCHISE AGREEMENT NON-COMPETITION, NON-DISCLOSURE, AND PROPRIETARY RIGHTS AGREEMENT
I agree that during the term of my employment by, ownership participation in, association with or service to Franchisee, or at any time thereafter, I will not communicate, divulge or use for the benefit of any other person, persons, partnership, proprietorship, association, corporation or entity, Franchisor's proprietary and confidential information relating to the development and operation of Restaurants, including but not limited to: (1) ingredients, recipes, and methods of preparation and presentation of food products Franchisor authorizes; (2) site selection criteria for Restaurants and plans and specifications for the development of Restaurants; (3) sales, marketing and advertising programs and techniques for Restaurants; (4) identity of suppliers, and knowledge of specifications and pricing for food products, materials, supplies and equipment, Franchisor authorizes; (5) knowledge of operating results and financial performance of Restaurants, other than those Restaurants Franchisee owns; (6) methods of inventory control, storage, product handling, training and management relating to Restaurants; (7) computer systems and software programs; and (8) any and all other information Franchisor provides to me, Franchisee, Franchisee's Principal Owners or Affiliates, including but not limited to the Operations Manual, that is designated orally or in writing as proprietary or confidential, or by its nature would reasonably be understood to be proprietary or confidential, regardless of whether such information is specifically designated as proprietary or confidential (collectively, all information referenced above, including examples (1) through (8), is known as the "Confidential Information"). Furthermore, any and all information, knowledge, know-how, techniques and information which the entities mentioned above or their officers designate as confidential is considered (and hereby acknowledged by me as) Confidential Information for the purposes of this Agreement, except information which I can demonstrate came to my attention before disclosure or which had become or becomes a part of the public domain through publication or communication by others (unless the publication or communication violates a similar confidentiality agreement), but in no event through any act of mine. I specifically understand that, without limitation, all the above items, concepts, and/or examples contained in the preceding paragraph constitute Confidential Information of Franchisor. I will at no time copy, duplicate, record or otherwise reproduce any of the Confidential Information or material containing it, in whole or in part, store them in a computer retrieval or database, nor otherwise make them available to any unauthorized person.
I further agree that, during the term of my employment/service/association or ownership participation, I will not, directly or indirectly, engage or participate in any Competitive Business (defined below in this paragraph), any of which such prohibited behavior I understand and hereby explicitly acknowledge would or could be injurious to, or (in Franchisor's sole judgment) have an adverse effect upon, Franchisor's protectable interests in the Confidential Information, the CRISP & GREEN trademark, or the goodwill and/or reputation of Restaurants generally. I agree that I am prohibited from engaging in any Competitive Business as a proprietor, partner, investor, shareholder, director, officer, employee, principal, agent, advisor, or consultant. For purposes of this Agreement, a "Competitive Business" means any business that: (1) operates as a restaurant or similar food-service provider and derives more than twenty percent (20%) of its revenue from selling salads and grain bowls in a fast-food, quick-service, drive-thru or drive-in format; or (2) grants franchises or licenses to others to operate the type of business specified in the preceding subparagraph (other than a CRISP & GREEN-branded restaurant operated under a franchise agreement with Franchisor). Despite the foregoing definition of a Competitive Business, nothing under this Agreement or the Franchise Agreement will prevent Individual from owning for investment purposes less than five percent (5%) of a Competitive Business whose stock or other forms of ownership interest are publicly traded on a recognized United States stock exchange, and so long as neither Individual nor Franchisee controls the company in question.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, the Non-Competition, Non-Disclosure, and Proprietary Rights Agreement protects Crisp & Green's confidential information and competitive interests. This agreement prevents franchisees and related parties from disclosing or using Crisp & Green's proprietary information, which includes recipes, site selection criteria, marketing programs, supplier information, operating results, inventory control methods, computer systems, and any other information designated as confidential. The agreement ensures that this information is not used to benefit any other entity or individual.
Furthermore, the agreement restricts franchisees from engaging in any competitive business during their association with Crisp & Green. A competitive business is defined as any restaurant or food-service provider that derives more than 20% of its revenue from selling salads and grain bowls in a fast-food or quick-service format, or any entity that grants franchises or licenses for similar businesses. This restriction aims to protect Crisp & Green's trademark, goodwill, and reputation by preventing franchisees from directly competing with the brand.
However, the agreement does allow for passive investments. An individual can own less than 5% of a publicly traded competitive business for investment purposes, provided that neither the individual nor the franchisee controls the company. This exception acknowledges that franchisees may have investment portfolios that include minor holdings in publicly traded companies, even if those companies are considered competitors. Overall, the agreement is designed to safeguard Crisp & Green's business model, trade secrets, and market position while allowing for limited exceptions that do not pose a significant competitive threat.