What are the consequences for a Hawaiian Bros Island Grill developer if they violate confidentiality, non-competition, or non-solicitation obligations?

Each Person Company designates, including Principals, General Managers, Executive Management and any other person identified on Exhibit C, must sign an agreement undertaking to be bound by confidentiality, non-competition, and nonsolicitation covenants in the form attached as Exhibit E ("Confidentiality and Non-Competition Agreement").

• (a) In consideration of Company's providing operations and training to Developer and disclosing to Developer the System and other Trade Secrets, Developer and its Controlling Principals agree to the following non-competition and non-solicitation covenants:
  • (i) During the term of this Agreement, Developer and each Controlling Principal, for so long as such Controlling Principal has an Ownership Interest in Developer (the "In-Term Restricted Period"), will not own or operate, directly or indirectly, or accept employment by, hold an interest in, lend money to, serve as guarantor for, or perform services in any capacity for, any Competitive Business (as defined below) that is located, operates, advertises or provides services in the United States or in any other country where a Hawaiian Bros Restaurant is located.
  • (ii) Developer, for two years following the termination or expiration of this Agreement, or Controlling Principal, for two years following the termination of all of his (A) Ownership Interests in Developer; or (B) the termination or expiration of this Agreement, whichever is first (as applicable, the "Post-Term Restricted Period"), may not own or operate, directly or indirectly, or accept employment by, hold an interest in, lend money to, serve as guarantor for, or perform services in any capacity for, any Competitive Business that is located, operates, advertises or provides services in any of the following:
    • 1. In the Development Area; or
    • 1. Within 20 miles of any outer boundary of the Development Area; or
    • 1. Within the area comprised of a 20 mile radius of any Hawaiian Bros Restaurant then existing or under development, whether franchised or owned by Company or any of its Affiliates or licensees; or
    • 1. Within 20 miles of any outer boundary of any territory for which Company has granted development rights for the development of one or more Hawaiian Bros Restaurants. (iii) In addition, during the In-Term Restricted Period and the applicable Post-Term Restricted Period, neither Developer nor any Controlling Principal will, without Company's prior written consent, directly or indirectly, for itself, himself or herself, as applicable, or on behalf of any other Person, solicit, serve, cater to, divert or attempt to divert to a Competitive Business, any business or customer of any Hawaiian Bros Restaurant, by direct or indirect inducement or otherwise.

For purposes of calculating the duration of the two-year period, any time during which Developer or any Controlling Principal is in violation or breach of the covenant will be excluded. "Competitive Business" means any island-inspired or Hawaiian-themed restaurant or restaurant that advertises and serves island-inspired or Hawaiian cuisine.

Source: Item 23 — RECEIPTS (FDD pages 77–262)