Does the Devon Creek franchise agreement specify any limitations on the use of confidential information after termination of employment?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
b. In further consideration for the disclosure to Covenantor of the Confidential Information and to protect the goodwill and unique qualities of the System, Covenantor further agrees and covenants that, upon the termination of Covenantor's employment or association with Franchisee and continuing for twenty-four (24) months thereafter, Covenantor shall not, for Covenantor or through, on behalf of or in conjunction with any person or entity:
(i) divert, or attempt to divert, any business, customer or referral source of the Franchised Business or of other franchisees in the Devon Creek System to any competitor, by direct or indirect inducement or otherwise,
(ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any residential or commercial lawncare business within the within twenty-five (25) miles outside of the boundaries of the Franchisee's Territory or within fifty (50) miles of any Devon Creek office location.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to the 2024 Devon Creek Franchise Disclosure Document, employees who have access to confidential information are subject to certain restrictions both during and after their employment. During their time with the franchisee, these employees, referred to as 'Covenantors,' must maintain the confidentiality of the information and use it only for operating the Devon Creek franchised business. They are prohibited from making unauthorized copies or disclosing the information to anyone except those employees who need it for training purposes. Upon request or termination of employment, the Covenantor must return all materials containing confidential information.
After termination of employment or association with the franchisee, the Covenantor is restricted for 24 months. During this period, they cannot divert or attempt to divert business, customers, or referral sources from the Devon Creek franchise to any competitor. Additionally, they are prohibited from participating in any residential or commercial lawn care business within 25 miles of the franchisee's territory or within 50 miles of any Devon Creek office location. These restrictions are designed to protect Devon Creek's goodwill and unique qualities of its system.
The agreement acknowledges that these covenants are reasonable in terms of time, geographical area, and scope of activity, ensuring they do not impose a greater restraint than necessary to protect Devon Creek's business interests. If any part of these restrictions is deemed unreasonable, the agreement provides for a reduction in time or geographic scope to ensure enforceability. This ensures that former employees are not unfairly restricted while still protecting the franchisor's confidential information and business interests.