What provisions must be included in the confidentiality and non-compete agreements signed by a Devon Creek franchisee's employees?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, the parties agree as follows:
1. Confidentiality Agreement.
- a. Covenantor shall, at all times, maintain the confidentiality of the Confidential Information and shall use such Confidential Information only in the course of his or her employment by or association with Franchisee in connection with the operation of a Franchised Business under the Franchise Agreement.
- b. Covenantor shall not at any time make copies of any documents or compilations containing some or all of the Confidential Information without Franchisor's express written permission.
- c. Covenantor shall not at any time disclose or permit the disclosure of the Confidential Information except, and only then to the limited extent necessary, to those employees of Franchisee for training and assisting such employees in the operation of the Franchised Business.
- d. Covenantor shall surrender any material containing some or all of the Confidential Information to Franchisee or Franchisor, upon request, or upon termination of employment or association with Franchisee.
- e. Covenantor shall not at any time, directly or indirectly, do any act or omit to do any act that would or would likely be injurious or prejudicial to the goodwill associated with the System.
- f. Covenantor agrees that no Confidential Information may be reproduced, in whole or in part, without written consent.
2. Covenants Not to Compete.
a. In order to protect the goodwill and unique qualities of the System, and in consideration for the disclosure to Covenantor of the Confidential Information, Covenantor further agrees and covenants that during Covenantor's employment or association with Franchisee, 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 Devon Creek franchisees in the System to any competitor, by direct or indirect inducement or otherwise,
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, employees of a Devon Creek franchisee (referred to as 'Covenantor') must adhere to specific confidentiality and non-compete obligations. The confidentiality agreement mandates that the employee maintain the confidentiality of the Confidential Information, using it only for operating the Franchised Business. The employee cannot make copies of confidential documents without Devon Creek's express written permission and can only disclose Confidential Information to other employees for training purposes. Upon request or termination of employment, the employee must surrender all materials containing Confidential Information and must not act in any way that harms the goodwill of the Devon Creek system. Reproduction of Confidential Information is prohibited without written consent.
The non-compete agreement states that during employment with the Devon Creek franchisee, the employee is prohibited from diverting or attempting to divert any business, customer, or referral source from the Franchised Business or other Devon Creek franchisees to any competitor. This restriction applies whether the employee acts directly or indirectly, for themselves or in conjunction with others.
These provisions are designed to protect Devon Creek's confidential information, trade secrets, and customer relationships. For a prospective franchisee, this means they must ensure their employees sign and adhere to these agreements. Failure to enforce these agreements could result in damage to the Devon Creek brand and potential legal repercussions for the franchisee. The franchisee also needs to understand that Devon Creek is a third-party beneficiary of these agreements and can directly enforce them against the employee.