How does the Bananas Smoothies Frozen Yogurt agreement define 'System' in terms of confidentiality?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
Confidants shall hold in confidence the System, and all parts thereof, and shall not disclose the System, or any part thereof, to any person, entity, firm or corporation.
It is understood and agreed that the System encompasses but is not limited to, a program of accounting, identification, schemes, specifications, standards, management systems, recipes, menus, techniques, financial information (such as product costs and sources of supply), and business operations and procedures that would, if used by other persons, firms or corporations, give such other persons, firms or corporations a substantial competitive advantage that is presently enjoyed by Franchisor, each of which Confidants acknowledge is a trade secret of, and proprietary to, Franchisor and/or its affiliate.
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt FDD, the franchisee, referred to as 'Confidant,' must maintain the confidentiality of the 'System.' The System includes, but is not limited to, a program of accounting, identification, schemes, specifications, standards, management systems, recipes, menus, techniques, financial information (such as product costs and sources of supply), and business operations and procedures. Bananas Smoothies Frozen Yogurt considers these elements trade secrets, giving the brand a competitive advantage.
The franchisee is prohibited from disclosing the System or any part of it to any unauthorized person, entity, firm, or corporation. This obligation extends both during the term of the Franchise Agreement and after its termination, expiration, or non-renewal. The franchisee can only disclose information to employees or agents who need access to it to construct or operate the restaurant.
Unauthorized use or disclosure of confidential information and trade secrets could cause significant harm to Bananas Smoothies Frozen Yogurt. The Confidential Operations & Training Manual, other designated manuals, materials, confidential information, and trade secrets remain the sole property of the franchisor and/or its affiliate. The franchisee gains no ownership rights to these items, only the right to use them as authorized by the agreement.
This confidentiality clause is a standard practice in franchising to protect the franchisor's intellectual property and competitive advantage. Prospective Bananas Smoothies Frozen Yogurt franchisees should carefully review these restrictions and ensure they understand their obligations to maintain the confidentiality of the System.