What is the consequence if a Bambu franchisee negligently discloses trade secrets of Bambu?

According to Bambu's 2025 Franchise Disclosure Document, if a franchisee negligently discloses trade secrets or confidential information of Bambu to any unauthorized person, it constitutes an 'Unauthorized Disclosure' and can lead to default under the franchise agreement. This means that even unintentional disclosure of sensitive information like recipes, FRC Materials, or other proprietary data can have serious repercussions.

Bambu emphasizes the importance of protecting its Confidential Information, viewing it as unique, exclusive property, and a trade secret with valuable goodwill. The FDD states that unauthorized disclosure or use of this information would be wrongful and cause irreparable injury and harm to Bambu. This highlights the need for franchisees to implement strict protocols to safeguard confidential data and ensure that employees are properly trained and understand the importance of maintaining confidentiality.

The franchise agreement requires franchisees to prevent the disclosure of confidential information, including but not limited to drink and food item preparation information, ingredients and cooking recipes, menus, food preparation techniques and methods, customer and loyalty member lists, vendor lists, any and all information contained in the FRC Materials, and any information of whatever nature which gives Bambu and its affiliates an opportunity to obtain an advantage over its competitors. Franchisees must take proactive measures to protect this information, as even negligent disclosure can trigger default consequences under the agreement.

To mitigate this risk, Bambu reserves the right to require franchisees to have their officers, directors, partners, shareholders, members, managers, and employees (including employed Bambū Certified Team Leaders) who have access to Confidential Information, and their immediate family members, execute and submit to Bambu a Nondisclosure and Noncompetition Agreement. This agreement contains restrictions designed to protect Bambu's confidential information. Franchisees must provide Bambu with copies of these agreements, demonstrating their commitment to safeguarding trade secrets and confidential data.