What is the impact of breaching the obligation of Developer under the Development Agreement on the use of Confidential Information for Ella Cafe?

According to Ella Cafe's 2024 Franchise Disclosure Document, the Development Agreement emphasizes the importance of maintaining the confidentiality of Ella Cafe's proprietary information. The developer is obligated to protect this information and only use it for authorized purposes related to the development of Coffee Houses. This obligation extends beyond the termination or expiration of the Development Agreement.

Specifically, the Development Agreement states that the developer and its owners must maintain the confidentiality of all Confidential Information. The developer is permitted to share Confidential Information only with employees who need to know it for the development of Coffee Houses. This obligation to protect Ella Cafe's Confidential Information survives the expiration or termination of the Development Agreement.

Furthermore, the confidentiality agreement included in Item 23 states that a violation of the Confidentiality Agreement will cause Franchisor and Developer irreparable harm; therefore, Developer and/or Franchisor may apply for the issuance of an injunction preventing a violation of this Confidentiality Agreement, and the violating party agrees to pay Developer and Franchisor all the costs it/they incur(s), including, without limitation, legal fees and expenses, if this Confidentiality Agreement is enforced against them. This highlights the serious consequences of misusing or disclosing Ella Cafe's Confidential Information, including potential legal action and financial penalties.