What documentation are Mr. Sandless franchisees required to provide to the franchisor for obtaining intellectual property rights?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
You shall require and obtain execution of covenants similar to those set forth in this Section 19.4 (including covenants applicable upon the termination of a person's employment with you) from all employees, contractors or third persons who will have access to Mr. Sandless proprietary and Confidential Information, and shall provide to us to an executed versions thereof. Such covenants shall be substantially in the form set forth in Attachment 4 as revised and updated from time to time and contained in the Manual. You shall indemnify and hold us harmless from any and all liability, loss, attorneys' fees, or damage we may suffer as a result of your failure to obtain executed restricted covenants by employees, agents and third persons as required by this Section.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, franchisees must ensure that all employees, contractors, and third parties who have access to Mr. Sandless's confidential information sign covenants similar to those outlined in Section 19.4 of the agreement. These covenants must also apply even after a person's employment with the franchisee ends. The franchisee is then required to provide executed versions of these covenants to Mr. Sandless. The specific form for these covenants is detailed in Attachment 4 of the manual, which may be revised and updated periodically.
This requirement ensures that Mr. Sandless's intellectual property and confidential information are protected by legally binding agreements with all individuals who have access to it through the franchisee's operations. The franchisee bears the responsibility of obtaining these signed covenants and providing them to Mr. Sandless, thus ensuring a chain of protection for the brand's proprietary information.
Failure to obtain these executed covenants can result in the franchisee being liable for any losses, attorney's fees, or damages suffered by Mr. Sandless due to this failure. This underscores the importance of diligently adhering to this requirement to avoid potential legal and financial repercussions. This is a fairly standard practice in franchising, as franchisors need to protect their intellectual property and trade secrets across all franchise locations.