What is the Bang Cookies franchisee required to do regarding the Know-How upon termination 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 the 2024 Bang Cookies Franchise Disclosure Document, franchisees have specific obligations regarding the Know-How both during the term of the agreement and after its expiration or termination. The franchisee must not use the Know-How in any business or capacity other than operating the Franchised Business as instructed by Bang Cookies. They are also obligated to maintain the confidentiality of the Know-How at all times and must not make unauthorized copies of any documents containing it.
Bang Cookies requires franchisees to take all reasonable steps to prevent unauthorized use or disclosure of the Know-How, as directed by Bang Cookies. Upon the expiration, termination, or transfer of the Franchise Agreement, the franchisee must immediately stop using the Know-How. These obligations extend not only to the franchisee but also to the franchisee's owners and spouses, who must sign a Franchise Owner and Spouse Agreement and Guaranty.
Furthermore, these restrictions apply to the franchisee's directors, officers, employees, and agents if they had access to the Know-How and previously signed a Confidentiality Agreement. This ensures that the confidential information and operational knowledge of Bang Cookies remain protected even after the franchisee exits the system. This is a standard practice in franchising to protect the brand's proprietary information and maintain a competitive advantage.