factual

What organizational, physical, administrative, and technical measures must an Auntie Annes franchisee take to protect Customer Information?

Auntie_Annes Franchise · 2024 FDD

Answer from 2024 FDD Document

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EXHIBIT C OTHER AGREEMENTS

NON-DISCLOSURE AND CONFIDENTIALITY AGREEMENT

(Prospective Franchisee)

During the process of investigating the purchase of an Auntie Anne's franchise, the undersigned has expressed an interest in obtaining information about the Auntie Anne's franchise program. Auntie Anne's Franchisor SPV LLC (the "Franchisor") is comfortable providing the undersigned with such information, however, due to the sensitive nature of the information that is likely to be disclosed to the undersigned, it is necessary for the Franchisor to ensure that the information is maintained in confidence by the undersigned and not disclosed in an unauthorized manner. Therefore, in consideration for our agreement to provide the undersigned with access to the Franchisor's Confidential Information (as defined below), the undersigned agrees to the following requirements and restriction, effective with the signing of this Agreement and continuing for so long as the Confidential Information remains confidential and proprietary to the Franchisor:

    1. The undersigned agrees to use the Confidential Information (as defined below) to which he/she is exposed only in connection with the undersigned's investigation of an Auntie Anne's franchise and for no other purpose.
    1. The undersigned agrees to maintain the Confidential Information in strictest confidence and not to copy, reproduce or otherwise transmit the Confidential Information without the Franchisor's prior written consent, which may be denied in the Franchisor's sole discretion.
    1. The undersigned may not disclose or disseminate the Confidential Information to any third party without the Franchisor's prior written consent, except the undersigned may share the Confidential Information with his/her financial and legal advisors on a need to know basis only and only if such advisors agree to be bound by the terms and conditions of this Agreement.
    1. At the Franchisor's request, upon the undersigned's completion of his/her investigation of an Auntie Anne's franchise, the undersigned agrees to return to the Franchisor all Confidential Information received by the undersigned or to otherwise dispose of it in accordance with the Franchisor's instructions.

For purposes of this Agreement, "Confidential Information" shall mean all financial, business, market and operating information of any kind to relating to the Auntie Anne's franchise program or the operation of an Auntie Anne's franchise, all recipe ingredients, operational methods and processes, shop layouts, equipment specifications, list of suppliers and vendors, financial information pertaining to the Franchisor, shop design criteria, shop location criteria, blueprints, operational and financial standards, and all related matters regarding Auntie Anne's businesses, whether communicated in writing or orally. "Confidential Information" does not include data, material or information: (i) which is known to the undersigned at the time of disclosure as demonstrated by the undersigned's files and records; (ii) becomes known to the undersigned from another source without confidentiality restrictions; or (iii) is or becomes part of the public domain through no act or omission by the undersigned.

Source: Item 22 — CONTRACTS (FDD page 106)

What This Means (2024 FDD)

The 2024 Auntie Anne's Franchise Disclosure Document outlines several measures franchisees must take to protect confidential information. These measures primarily focus on maintaining the confidentiality of information related to the Auntie Anne's franchise program itself, rather than specific customer information. A prospective franchisee is required to sign a Non-Disclosure and Confidentiality Agreement during the investigation process, agreeing to use the confidential information only for evaluating the franchise opportunity. They must maintain the information in strict confidence, avoiding any unauthorized copying, reproduction, or transmission.

Auntie Anne's franchisees can only disclose confidential information to their financial and legal advisors if those advisors agree to be bound by the same confidentiality terms. Upon completing the investigation of the franchise, the franchisee must return all confidential information to Auntie Anne's or dispose of it according to their instructions. Confidential information includes a wide array of data, such as financial, business, market, and operational details, recipes, processes, shop layouts, equipment specifications, supplier lists, financial data related to the franchisor, shop design criteria, and operational and financial standards.

Once the franchise agreement is in effect, franchisees and their owners must not use confidential information or trade secrets for purposes outside the agreement. They are prohibited from disclosing such information to anyone except directors, officers, owners, management employees, or others with a legitimate need to know for operating the franchised business, provided these individuals are also bound by confidentiality agreements. Divulging or using confidential information for the benefit of any other person or entity is forbidden unless expressly authorized by Auntie Anne's.

While the FDD excerpts focus on protecting Auntie Anne's confidential business information, it does not specifically detail the measures a franchisee must take to protect customer information. For detailed information regarding the protection of customer information, a prospective franchisee should ask the franchisor directly about required organizational, physical, administrative, and technical measures.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.