Are claims related to the violation of confidentiality agreements subject to mediation or arbitration under the Kitchen Solvers franchise agreement?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything contained in Sections 13.A.1 or 13.A.2 to the contrary, the parties agree that the following claims will not be subject to mediation or arbitration: Any controversy, dispute, or claim that concerns an allegation that you and/or any Personal Guarantor has violated (or threatens to violate, or poses an imminent risk of violating): (i) any provision relating to use of the Trademarks, the System or any Confidential Information; (ii) any federally or state protected intellectual property rights in the Trademarks, the System, or in any Confidential Information; (iii) any of the restrictive covenants contained in this Agreement, including the confidentiality and non-competition covenants; or (iv) any claims to collect past due amounts owed to us and/or our affiliates.
- B. Injunctive Relief; Civil Action. Notwithstanding Subparagraph 13.A.1 and 13.A.2 above, you recognize that your Business is one of a number of businesses identified by the Trademarks and similarly situated and selling to the public similar products and services, and hence the failure on the part of a single franchisee to comply with the terms of its agreement could cause irreparable damage to us and/or to some or all of our other franchisees. Therefore, it is mutually agreed that in the event of a breach or threatened breach of any of the terms of this Agreement, the other party will be entitled to an injunction restraining such breach and/or to a decree of specific performance, without showing or proving any actual damage, together with recovery of reasonable attorneys' fees and other costs incurred in obtaining said equitable relief, until such time as a final and binding determination is made by the arbitrator. The foregoing equitable remedies are in addition to, and
not in lieu of, all other remedies or rights that the parties might otherwise have by virtue of any breach of this Agreement by the other party.
Source: Item 22 — Contracts (FDD page 49)
What This Means (2025 FDD)
According to the 2025 Kitchen Solvers Franchise Disclosure Document, claims related to the violation of confidentiality agreements are specifically excluded from mandatory mediation or arbitration. Kitchen Solvers reserves the right to pursue other legal avenues, such as seeking an injunction, in the event of a breach or threatened breach of confidentiality.
This means that Kitchen Solvers can immediately seek a court order to stop a franchisee from violating confidentiality agreements, without first having to go through mediation or arbitration. This is a significant advantage for Kitchen Solvers, as it allows them to quickly address potential damage caused by the unauthorized disclosure or use of confidential information. The franchisee, on the other hand, does not have the same option and must engage in mediation/arbitration before pursuing legal action.
For a prospective Kitchen Solvers franchisee, this clause highlights the importance of understanding and adhering to the confidentiality provisions in the franchise agreement. Violating these provisions could lead to immediate legal action and potential financial penalties. It is also important to note that Kitchen Solvers can seek injunctive relief and recover reasonable attorney's fees and other costs incurred in obtaining said equitable relief.