Non Disclosure Agreement Explained
Posted on: 24/07/2012
Having shortlisted one or two Franchises you’re on your way to the next stage of the process.
Every Franchise has a variation on the order of how they operate for more serious prospective Franchisees but most will require you to complete and sign a Non-Disclosure Agreement (NDA) or sometimes referenced as Confidentiality Agreement.
Depending on the structure and information made available to you it’s usual practice for a Franchisor to request you complete, sign and return an NDA or Confidentiality Agreement before attending a Discovery Day or meeting with them.
This is simply a promise not to disclose facts and figures and standard throughout the Franchise industry once you move further along the process.
It helps to safeguard confidential information about the Franchise and to protect the brand and trading information from reaching the competition.
You can expect it to be a short document that obtains your written consent not to disclose or misuse any of the information the Franchisor presents to you during your meeting or Discovery Day.
Be careful to check before signing that the NDA or Confidentiality Agreement will allow you to discuss the information with professional consultants such as your financial advisor or legal representative.
There should also be exclusions in the document for any information that is in the public domain and for any information you’re legally required to provide.
Also pay close attention before signing to any restrictive covenants that may appear. Simply put, these are clauses that may state certain restrictions you’ll have to adhere to once you’ve signed.
This can include such aspects as not competing with the business, even if you decide not to proceed with the opportunity.
This is rare but well worth checking through to make sure before signing and returning to the Franchisor.
Generally, the Non-Disclosure Agreement or Confidentiality Agreement is a simple agreement that shouldn’t take too long to go through it before signing consent. As you can appreciate the Franchisor has gone through rigorous and often expensive processes to Franchise their business so it makes sense to protect it as much as they can.
If you’re not sure of anything in the Non-Disclosure Agreement or Confidentiality Agreement then it’s best to either ask the Franchisor to explain the terms further or get it double checked with your legal or financial representative.
Once completed, signed and returned you can look forward to finding out much more about the Franchise that you could soon be part of! Annette Du Bois -- The Franchise Growth Expert Copywriting, Marketing & PR Support For Ambitious Franchisors, http://www.franchisegrowthexpert.com © 2011 and beyond Annette Du Bois. All rights reserved.
To see how FranchiseUK can help you franchise your franchise business click here.