Is Monicals Pizza Company considered a third-party beneficiary of the Franchise Agreement?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor has the right to require Franchisee and any holder of a legal or beneficial interest in Franchisee (and any member of their immediate families or households), and any officer, director, executive, manager or member of the professional staff and all employees of Franchisee to execute a nondisclosure and non-competition agreement, in a form acceptable to Franchisor and the same as or substantially similar to the Nondisclosure and Non-Competition Agreement attached as Exhibit 2 ("Nondisclosure and Non-Competition Agreement"), upon execution of this Agreement or prior to each such person's affiliation with Franchisee. Upon Franchisor's request, Franchisee shall provide Franchisor with copies of all nondisclosure and non-competition agreements signed pursuant to this Section. Such agreements shall remain on file at the offices of Franchisee and are subject to audit or review as otherwise set forth herein. Franchisor shall be a third party beneficiary with the right to enforce covenants contained in such agreements.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, Monicals Pizza has the right to enforce specific covenants within agreements between the franchisee and certain individuals. Specifically, the franchisor can enforce the covenants in the Nondisclosure and Non-Competition Agreement.
This means that Monicals Pizza is a third-party beneficiary with the power to ensure compliance with these agreements. This is especially relevant to protect the brand's trade secrets, confidential information, and overall business interests.
For a prospective franchisee, this clause highlights the importance of ensuring that all employees and relevant parties sign and adhere to the Nondisclosure and Non-Competition Agreement. It also means that Monicals Pizza can directly take legal action against individuals who violate these agreements, providing an additional layer of protection for the franchise system.