What is the Bang Cookies franchisee prohibited from doing with the Know-How during the term of the agreement?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
fidential Information. Franchisee agrees that competition by Franchisee, Owners, Spouses and/or Immediate Family Members could jeopardize the entire System and cause irreparable harm to Franchisor and franchisees of Bang Cookies Shops. Accordingly, Franchisee and Franchisee's Owners and Spouses agree to comply with the restrictive covenants set forth in this Article 6 and throughout this Agreement.
6.B. RESTRICTIVE COVENANTS: KNOW-HOW
Franchisee agrees that, at all times, both during the Term of this Agreement and after its expiration or termination, Franchisee: (a) shall not use the Know-How in any business or capacity other than the operation of the Franchised Business pursuant to this Agreement and as instructed by Franchisor; (b) shall maintain the confidentiality of the Know-How at all times; (c) shall not make unauthorized copies of documents containing any Know-How; (d) shall take all reasonable steps that Franchisor requires from time
to time to prevent unauthorized use or disclosure of the Know-How; and (e) shall stop using the Know-How immediately upon the expiration, termination or Transfer of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, franchisees are restricted in how they can use the Know-How, both during the term of the agreement and after its expiration or termination. Specifically, a franchisee cannot use the Know-How in any business or capacity other than operating their Bang Cookies shop as instructed by the franchisor. This means the franchisee's use of the Know-How is strictly limited to running their franchised business under the terms of the agreement.
Additionally, franchisees must maintain the confidentiality of the Know-How at all times and are prohibited from making unauthorized copies of any documents containing it. They must also take reasonable steps to prevent unauthorized use or disclosure of the Know-How, as directed by Bang Cookies. Upon termination or transfer of the franchise agreement, the franchisee must immediately cease using the Know-How altogether. These restrictions also apply to the franchisee's owners, spouses, directors, officers, employees, and agents, ensuring a comprehensive approach to protecting Bang Cookies's proprietary information.
These stipulations are typical in franchising, as they protect the franchisor's competitive advantage and brand integrity. The Know-How, which includes operational methods, recipes, and other confidential information, is a key asset of the Bang Cookies system. By preventing franchisees from using this information outside of the franchised business, Bang Cookies aims to maintain consistency and prevent the Know-How from benefiting competitors. Prospective franchisees should carefully consider these restrictions and ensure they are comfortable with the limitations on their use of the Know-How, both during and after the franchise term.