Civil Case (Tel Aviv) 47423-07-18 Max Management Israel Ltd. (formerly Max Stock Ltd.) v. Naftali Shimshon - part 2

The Contractual System

2. At the center of the dispute are three branches of the Max Stock chain. One is located in Bat Yam, the second is in Ashdod, and the third is in Sderot.
3. On June 1,2014, the franchise agreement was signed at the Bat Yam branch (hereinafter: the Bat Yam Agreement; Appendix 2 to the counterclaim) between Max Stock and the four franchise owners: CPA Yaniv Koren, Mr. Raphael Zvihai, Mr. Yaniv Zvihai and Mr. Naftali Shimshon (hereinafter: Shimshon).
   1. In accordance with the agreement, the franchisees received a license to operate and manage the branch while making use of the Max brand (clause 2).
   2. Clause 4 of the agreement clarified that the concession period is not limited in time, and that the agreement will remain in place "as long as it is not cancelled... provided that the concessionaire has fulfilled all its obligations under this agreement as well as all the provisions of the company [Max Stock], both those specified in this agreement and those that will be delivered to it after the signing of this agreement."

• Clause 11.14 of the agreement included a confidentiality provision, according to which "the franchisee undertakes not to disclose to any third party any information that it may have in its possession and/or in connection with its activity in the branch... and this is indefinitely."

11. Clause 11.15 of the agreement included a non-competition clause whereby "the franchisee undertakes not to compete in the company's business and/or its customers and/or its reputation, directly and/or indirectly, by itself and/or through others, whether as an independent or as an employee, including by a partnership or by himself or through others, during the license period and after the end of the license period."
12. Alongside these provisions, Chapter 13 of the agreement added restrictions regarding the prohibition of competition and the maintenance of confidentiality.

Clause 13.3 stipulates that "the franchisee undertakes that the list of customers and/or products sold in the branch and/or the suppliers of the branch and/or the chain and/or any other list used by the franchisee in its activity in the company's network, will be a trade secret of the company and that it undertakes not to use it, both during the license period and thereafter, but for the purpose of operating the branch during the license period."