Does the Aw franchise agreement specify any exceptions to the requirement to cease using Confidential Information upon termination?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
16.4 Cease Operations. Upon termination or expiration of this Agreement, you shall immediately cease to operate your Papa Ray's Pizza Restaurant under this Agreement, either as a franchised or as a non-franchised facility.
In addition, in the course of the operation of the Papa Ray's Pizza Restaurant, and for six (6) months after the termination or expiration of this Agreement, you or your employees may develop ideas, inventions, formulas, concepts, methods, techniques or improvements relating to the Papa Ray's Pizza Restaurant, which you agree to disclose to us and which we may then authorize you to use in the operation of the Papa Ray's Pizza Restaurant. You agree that any corresponding intellectual property rights (including without limitation any rights in utility or design patents, know-how, trade secrets, trademarks, services marks and copyrights) in such ideas, inventions, formulas, concepts, methods, techniques or improvements will be our property and the title and rights to which shall be legally assigned to us immediately in writing by you, your Owners, your managers and/or employees. All of such information developed by you or your employees will be included in the term "Confidential Information," as defined above.
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,
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, franchisees must immediately cease using any Confidential Information. The agreement does not explicitly state any exceptions to this requirement. Franchisees are obligated to return all copies of the Operations Manual, proprietary software, and other materials containing Aw's proprietary information. This obligation is part of a broader set of requirements upon termination, including ceasing operations as an Aw franchise.
Additionally, for six months after the termination or expiration of the agreement, any ideas, inventions, formulas, concepts, methods, techniques, or improvements related to the Aw restaurant that the franchisee or their employees develop must be disclosed to Aw. Aw can then authorize the franchisee to use these in the operation of the restaurant. Intellectual property rights related to these developments become Aw's property and must be legally assigned to them. This information is also included in the definition of "Confidential Information."
Franchisees must also maintain the absolute confidentiality of the Confidential Information during and after the term of the agreement and implement procedures to prevent unauthorized use or disclosure. This includes restrictions on disclosure to employees and the use of non-disclosure and/or non-competition agreements for employees. The franchise agreement emphasizes that the relationship between Aw and the franchisee does not grant the franchisee any interest in the Confidential Information beyond the right to use it under the agreement.
Given the lack of explicit exceptions and the broad definition of Confidential Information, prospective Aw franchisees should seek clarification from Aw regarding any potential scenarios where continued use of certain information might be necessary or beneficial during or after the termination of the franchise agreement. Understanding these obligations is crucial for franchisees planning their business activities post-termination.