What is the consideration for the member's agreement to the terms of the Engineering For Kids non-disclosure agreement?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
RIA
APPENDIX C
SAMPLE OF NON-DISCLOSURE AND NON-COMPETITION AGREEMENT (BETWEEN FRANCHISEE AND ITS PERSONNEL)
| 2 0 2 4 | 2 0 2 3 | 2 0 2 2 | | |---|---|---|---| | A S S E T S | | | | | C u r r e n t a s s e t s | | | | | C a s h a n d c a s h e q u iv a le n t s | $ 2 1 ,7 3 5 | $ 1 1 7 ,6 5 5 | $ 3 1 ,0 3 6 | | A c c o u n t s r e c e iv a b le , n e t o f a llo w a n c e fo r c r e | d it lo s s e s 5 8 ,6 6 1 | 4 5 ,5 2 3 | 6 2 ,2 3 4 | | D u e fr o m r e la t e d p a r t y | 1 4 ,9 6 8 | - | - | | P r e p a id e x p e n s e s | 2 ,5 7 5 | 6 ,2 0 0 | 6 ,3 1 1 | | T o t a l c u r r e n t a s s e t s | 9 7 ,9 3 9 | 1 6 9 ,3 7 8 | 9 9 ,5 8 1 | | I n t a n g ib le a s s e t s , le s s a c c u m u la t e d a m o r t iz a t io | n 4 0 ,4 1 7 | 4 9 ,0 4 6 | 2 0 ,1 1 0 | | T O T A L A S S E T S | $ 1 3 8 ,3 5 6 | $ 2 1 8 ,4 2 4 | $ 1 1 9 ,6 9 1 | WHEREAS, Engineering for Kids International, LLC ("EFK") has developed a distinctive set of specifications and operating procedures (collectively, the "System") for the operation of "Engineering For Kids" youth educational program businesses ("Engineering For Kids Businesses").
WHEREAS, EFK and Franchisee have executed a Franchise Agreement ("Franchise Agreement") granting Franchisee the right to operate an Engineering For Kids Business under the terms and conditions of the Franchise Agreement;
WHEREAS, Member, by virtue of his or her position with Franchisee, will gain access to certain of EFK's Confidential Information, as defined herein, and must therefore be bound by the same confidentiality and non-competition agreement that Franchisee is bound by.
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to the 2025 Engineering For Kids FDD, the consideration for a member's agreement to the terms of the non-disclosure agreement includes the premises outlined in the agreement, the conditions stated within the agreement, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged. The member, by virtue of their position with the franchisee, will gain access to confidential information belonging to Engineering For Kids and must adhere to the same confidentiality and non-competition terms as the franchisee. This ensures that sensitive business information is protected.
Specifically, the member acknowledges that they will receive valuable specialized training and confidential information regarding the operational, sales, promotional, and marketing methods and techniques of Engineering For Kids and its System. This access to proprietary knowledge is a key component of the consideration. The non-disclosure agreement aims to protect Engineering For Kids's business methods, trade secrets, and confidential information from unauthorized use or disclosure, which could harm the franchise system.
The member also agrees to covenants not to compete, meaning they cannot engage in any competitive business during the term of the franchise agreement, unless approved in writing by Engineering For Kids. This restriction extends to owning, managing, being employed by, advising, or having any interest in a competitive business. The definition of a "Competitive Business" includes any business providing similar youth educational and enrichment programs in math, science, technology, or engineering. This non-compete clause ensures that members do not use the confidential information and training they receive to benefit a competing business, thereby protecting Engineering For Kids's market position and business model.