Who is protected by the non-disparagement clause in the Red Wagon Club agreement?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
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, the non-disparagement clause protects Franchisee, Franchisor, the Brand, Franchisor's franchisees and licensees, and each of the foregoing entity's owners, directors, managers, officers, employees, or representatives. This means that the Licensee is prohibited from making negative statements about these protected parties.
This clause extends both during the term of the agreement and after its expiration or termination. It requires the Licensee to ensure that their current and former owners, officers, directors, employees, representatives, affiliates, successors, and assigns also refrain from disparaging the protected parties. The clause aims to prevent any action that could defame, ridicule, scandalize, or injure the goodwill of those associated with the Red Wagon Club.
For a prospective Red Wagon Club franchisee, this non-disparagement clause highlights the importance of maintaining a positive relationship with the franchisor and other franchisees. It also demonstrates the franchisor's commitment to protecting its brand reputation and the interests of its franchisees and related parties. Franchisees should be aware of this obligation and ensure that their staff and associates also comply with this requirement to avoid potential legal repercussions.