Are there any exceptions to the requirement that an Aw franchisee must cease using Confidential Information after termination?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
cense to use the Marks, and therefore, your right to use any domain name, website, or other presence on the internet using the Marks, and to authorize a transfer of same to us or our designee;
- (f) furnish to us within thirty (30) days after the effective date of termination or expiration evidence satisfactory to us of your compliance with the foregoing obligations.
- 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.
- 16.5 Assignment of Lease. Upon termination or expiration of this Agreement, at our option you shall immediately assign to us your interest in any lease then in effect for the premises of your Papa Ray's Pizza Restaurant, as you agreed to in the Exhibit 3 Collateral Assignment of Lease.
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, the franchisee must immediately cease using any Confidential Information disclosed during the agreement. This includes returning all copies of the Operations Manual, proprietary software, and other materials containing Aw's proprietary information.
However, there is a specific scenario where the franchisee's involvement in developing ideas related to the Aw restaurant post-termination affects the confidentiality requirement. For six months after the agreement ends, if the franchisee or their employees develop any ideas, inventions, formulas, concepts, methods, techniques, or improvements related to Aw, they must disclose these to Aw. Aw can then authorize the franchisee to use these developments in the operation of the Aw restaurant.
Any intellectual property rights arising from these developments, such as patents, trade secrets, trademarks, service marks, and copyrights, will become Aw's property and must be legally assigned to them. This information developed by the franchisee or their employees is also included in the definition of "Confidential Information." This clause ensures that Aw retains control over any improvements or innovations developed even after the franchise agreement terminates, while also potentially allowing the franchisee to continue using those developments if authorized by Aw.