During and after the Red Wagon Club license term, what are licensees prohibited from doing regarding disparagement?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
- (b) Non-Disparagement.
During and after the Term, Licensee agrees not to, and to cause Licensee's current and former owners, officers, directors, employees, representatives, affiliates, successors, assigns not to disparage or otherwise speak or write negatively, directly or indirectly, of Franchisee, Franchisor, the Brand, Franchisor's franchisees and licensees, and each of the foregoing entity's owners, directors, managers, officers, employees, or representatives, or take any other action which would, directly or indirectly, subject any of the foregoing to defame, ridicule, scandal, reproach, scorn, or indignity, or which would negatively impact or injure the goodwill of the foregoing.
Source: Item 23 — RECEIPTS (FDD pages 47–142)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, licensees are prohibited from disparaging the franchisor, franchisee, the brand, other franchisees and licensees, and their respective personnel both during and after the term of the license agreement. This includes refraining from speaking or writing negatively, directly or indirectly, about these entities or individuals.
This non-disparagement clause extends to the licensee's current and former owners, officers, directors, employees, representatives, affiliates, successors, and assigns. The licensee must ensure that these parties also refrain from any actions that could defame, ridicule, scandalize, scorn, or otherwise negatively impact the goodwill of the Red Wagon Club brand and its associated entities.
For a prospective Red Wagon Club licensee, this means understanding that their speech and actions, as well as those of their associates, must not harm the reputation or goodwill of the franchise. Violating this clause could have legal and financial repercussions, as it is a legally binding covenant within the license agreement.