Under what circumstances must a Bang Cookies franchisee immediately stop using the Know-How?
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' 2024 Franchise Disclosure Document, a franchisee must immediately stop using the Know-How upon the expiration, termination, or transfer of the Franchise Agreement. The Know-How includes Bang Cookies' trade secrets and proprietary information related to the development, establishment, marketing, promotion, and operation of a Bang Cookies shop. This includes methods, techniques, inventory, product and service standards, specifications, and information within the operations manual and Confidential Information. This obligation extends not only to the franchisee but also to their owners, spouses, directors, officers, employees, and agents if they had access to the Know-How.
This provision ensures that Bang Cookies' confidential business practices and trade secrets are protected when a franchise relationship ends. The franchisee's owners and spouses must also agree to these terms by signing a Franchise Owner and Spouse Agreement and Guaranty. Similarly, any directors, officers, employees, or agents who had access to the Know-How must have signed a Confidentiality Agreement to be bound by these restrictions.
For a prospective Bang Cookies franchisee, this means understanding that the right to use Bang Cookies' Know-How is strictly tied to the active term of the Franchise Agreement. Upon termination, expiration, or transfer, all rights to use this information cease immediately. This is a standard practice in franchising to protect the brand's competitive advantage and proprietary information. Failure to comply with this provision could result in legal action from Bang Cookies to protect its trade secrets and confidential business information.