What are the consequences of unauthorized use of Aw's Confidential Information?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
(f) make any unauthorized use or disclosure of any Confidential Information, make any unauthorized use of the Marks or any other identifying characteristics of the System or otherwise impair the goodwill associated with these characteristics, or use, duplicate, or disclose any portion of the Operations Manual or other proprietary written materials;
(g) you (or any of your Owners) fail to comply with the covenants contained in Paragraph 9.2 and 9.3 of this Agreement,
9.1 Types of Confidential Information. We possess certain unique confidential and proprietary information and trade secrets consisting of the following categories of information,
methods, techniques, products, and knowledge developed by us and our franchisees: (4) methods, techniques, formats, specifications, procedures, information, systems and knowledge of and experience in the development, operation, and franchising of Papa Ray's Pizza Restaurants; (2) source of supply, ordering and inventory control and methods of providing the products and services sold at Papa Ray's Pizza Restaurants; (3) recipes and methods for preparation of food products; (4) knowledge of sales and profit performance of any one or more Papa Ray's Pizza Restaurants; (5) knowledge of test programs, concepts or results relating to new services and products; sources of products; (6) advertising, marketing and promotional programs; (7) construction, lay-out, equipping and decoration of Papa Ray's Pizza Restaurants; (8) selection and training of Papa Ray's Pizza Restaurant managers and other personnel; (9) methods of training managers and other employees; and (10) contents of the Operations Manual or other written material provided to you in whatever media. All such information will be referred to in this Agreement as "Confidential Information."
9.2 Non-disclosure Agreement. You agree that your relationship with us does not vest in you any interest in the Confidential Information other than the right to use it in the development and operation of Papa Ray's Pizza Restaurants under this Agreement, and that the use or duplication of the Confidential Information in any other business would constitute an unfair method of competition, a breach of this Agreement and copyright infringement. You acknowledge and agree that the Confidential Information belongs to us, is proprietary information, and may contain trade secrets belonging to us and is disclosed to you or authorized for your use solely on the condition that you agree, and you therefore do agree herein, that you: (1) will not use the Confidential Information during and after the term of this Agreement in any other business or capacity; (2) will maintain the absolute confidentiality of the Confidential Information during and after the term of this Agreement; (3) will not make unauthorized copies of any portion of the Confidential Information disclosed in written form; and (4) will adopt and implement all reasonable procedures we may prescribe from time to time to prevent unauthorized use or disclosure of the Confidential Information, including restrictions on disclosure to your employees and the use of non-disclosure and/or non-competition agreements we may prescribe for employees,
17.3 Enforcement of Covenants Not to Compete. You acknowledge that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to us for which no adequate remedy at law will be available. Accordingly, you hereby acknowledge that we may seek to obtain the entry of an injunction prohibiting any conduct by you or your Owners in violation of the terms of the covenants not to compete set forth in this Agreement. You expressly agree that it may conclusively be presumed that any violation of the terms of said covenants not to compete was accomplished by and through your unlawful use of our Confidential Information. Further, you expressly agree that the existence of any claims you may have against us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by us of the covenants not to compete set forth in this Agreement. You further agree to pay all costs and expenses (including reasonable attorneys' and experts' fees) incurred by the us in connection with the enforcement of those covenants not to compete set forth in this Agreement.
- 16.3 Confidential Information. You agree that upon termination or expiration (without renewal) of this Agreement, you will immediately cease to use in any business or otherwise the Confidential Information disclosed to you pursuant to this Agreement and will return to us all copies of the Operations Manual, any proprietary software and other materials containing our proprietary information which have been loaned to you by us.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, unauthorized use or disclosure of confidential information and failure to comply with the covenants in Paragraphs 9.2 and 9.3 of the agreement are grounds for termination of the franchise agreement. Aw defines confidential information as unique and proprietary information and trade secrets consisting of methods, techniques, products, knowledge, and experience in the development, operation, and franchising of Papa Ray's Pizza Restaurants. This includes, but is not limited to, recipes, methods for food preparation, knowledge of sales and profit performance, marketing programs, and the contents of the Operations Manual.
Unauthorized use of Aw's confidential information also constitutes an unfair method of competition, a breach of the Franchise Agreement, and copyright infringement. Franchisees acknowledge that the confidential information belongs to Aw and agree to maintain its absolute confidentiality during and after the term of the agreement. They are prohibited from using it in any other business or capacity and must implement procedures to prevent unauthorized use or disclosure, including non-disclosure and non-competition agreements for employees.
Furthermore, franchisees acknowledge that violating the non-compete covenants within the agreement would cause immediate and irreparable harm to Aw, potentially leading to an injunction prohibiting any conduct in violation of these covenants. Aw may presume that any violation of the non-compete terms involves unlawful use of their confidential information. Franchisees are also responsible for covering all costs and expenses, including attorney's fees, incurred by Aw in enforcing these non-compete covenants.
Upon termination or expiration of the franchise agreement, franchisees must immediately cease using Aw's confidential information in any business and return all copies of the Operations Manual, proprietary software, and other materials containing Aw's proprietary information. This ensures that Aw's trade secrets and confidential information remain protected, and franchisees do not gain an unfair competitive advantage after the agreement ends.