Who is a third-party beneficiary of the non-disclosure and non-competition agreements related to a Monicals Pizza franchise?
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 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 31–32)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, Monicals Pizza is a third-party beneficiary with the right to enforce the covenants contained in the non-disclosure and non-competition agreements. These agreements are required to be executed by the franchisee, any holder of legal or beneficial interest in the franchisee (including their immediate families or households), and any officer, director, executive, manager, member of the professional staff, and all employees of the franchisee. These individuals must sign an agreement that is acceptable to Monicals Pizza, similar to the Nondisclosure and Non-Competition Agreement attached as Exhibit 2.
This means that Monicals Pizza has the legal right to ensure that these individuals do not disclose confidential information or engage in competitive activities that could harm the franchise system. This protection extends to the trade secrets, operational methods, and overall goodwill associated with the Monicals Pizza brand. The franchisee is responsible for providing copies of these signed agreements to Monicals Pizza upon request and maintaining them on file for auditing purposes.
For a prospective Monicals Pizza franchisee, this clause highlights the importance of ensuring that all individuals associated with their franchise operation understand and adhere to the non-disclosure and non-competition terms. Failure to enforce these agreements could result in legal action by Monicals Pizza against the franchisee. It also demonstrates the franchisor's commitment to protecting its brand and confidential information, which benefits all franchisees within the system.