Is a 7 Brew franchisee allowed to use Confidential Information in another business?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not acquire any interest in any Confidential Information, other than the right to use certain Confidential Information as we specify in operating the Store during the Term according to Brand Standards and this Agreement's other terms and conditions. Using any Confidential Information in another business would constitute an unfair method of competition with us and our affiliates, suppliers, and franchisees. You acknowledge and agree that Confidential Information is proprietary, includes our and our affiliates' trade secrets, and is disclosed to you only on the condition that you, your owners, and your employees agree, and you and they do agree:
- (1) not to use any Confidential Information in another business or capacity and at all times to keep Confidential Information absolutely confidential, both during and after the Term (afterward for as long as the information is not generally known in the coffee industry);
- (2) not to make unauthorized copies of any Confidential Information disclosed via electronic medium or in written or other tangible form;
- (3) to adopt and implement all reasonable procedures we periodically specify to prevent unauthorized use or disclosure of Confidential Information, including disclosing it only to Store personnel and others needing to know the Confidential Information in order to operate the Store and using confidentiality and nondisclosure agreements with those having access to Confidential Information. (We have the right to pre-approve the forms of agreements you use solely to ensure that you adequately protect Confidential Information and the competitiveness of 7 BREW Stores. Under no circumstances will we control the forms or terms of employment agreements you use with Store employees or otherwise be responsible for your labor relations or employment practices.); and
- (4) not to sell, trade, or otherwise profit in any way from the Confidential Information (including by selling or assigning any Consumer Data or related information or Data), except during the Term using methods we have approved.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to the 2025 FDD, a 7 Brew franchisee is explicitly prohibited from using any Confidential Information in another business, both during the term of the franchise agreement and after its termination. The FDD emphasizes that using Confidential Information in another business would be considered an unfair method of competition against 7 Brew, its affiliates, suppliers, and other franchisees. Franchisees acknowledge that this information is proprietary and includes trade secrets.
The agreement specifies that franchisees, their owners, and employees must agree to keep Confidential Information absolutely confidential and not use it in any other business or capacity. They are also barred from making unauthorized copies of Confidential Information and must implement procedures to prevent its unauthorized use or disclosure. This includes disclosing the information only to personnel who need it to operate the 7 Brew store and using confidentiality agreements with those individuals.
Furthermore, franchisees are prohibited from selling, trading, or profiting from Confidential Information in any way, except during the term of the agreement and only through approved methods. Upon termination or expiration of the franchise agreement, franchisees must immediately cease using any Confidential Information and return all copies of the Operations Manual and other confidential materials to 7 Brew. The definition of Confidential Information includes information in the Operations Manual, store layouts, methods, techniques, and knowledge related to the operation of a 7 Brew store.