Are Baya Bar franchisees required to comply with non-disclosure and non-competition covenants after the agreement terminates?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
18.4 Survival. The rights and obligations of the parties contained in this Article 18 shall survive the expiration or sooner termination of this Agreement.
19. NON-DISCLOSURE AND NON-COMPETITION COVENANTS
19.1 Operations Manual.
- 19.1.1 Franchisor has provided to Franchisee, on loan, a current copy of the Manual. The Manual may be in hard copy or made available to Franchisee in digital, electronic or computerized form or in some other form now existing or hereafter developed that would allow Franchisee to view the contents thereof. If the Manual (or any changes thereto) are provided in a form other than physical copy, Franchisee shall pay any and all costs to retrieve, review, use or access the Manual. To protect the reputation and goodwill of Franchisor and to maintain high standards of operation under Franchisor's Marks, Franchisee shall operate all aspects of the Franchised Business in accordance with the Manual, as they may from time to time be modified by Franchisor, other written directives that Franchisor may issue to Franchisee from time to time, whether or not such directives are included in the Manual, and any other manual and materials created or approved for use in the operation of the Franchised Business.
- 19.1.2 Franchisee and any and all Principals shall at all times treat the Manual, written directives, and other materials and any other confidential communications or materials, and the information contained therein, as confidential and shall maintain such information as trade secret and confidential in accordance with this Article and this Agreement. Franchisee and Franchisee's Principals, if any, shall not divulge and make such materials available to anyone other than those of Franchisee's employees who require the information contained therein to operate the Franchised Business. Franchisee shall, prior to disclosure, fully train and inform its employees on all the restrictions, terms and conditions under which it is permitted to use Franchisor's intellectual, proprietary and confidential
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to the 2024 Baya Bar Franchise Disclosure Document, both non-disclosure and non-competition covenants apply even after the franchise agreement terminates. Franchisees must maintain the confidentiality of the Baya Bar's operations manual, written directives, confidential communications, and other materials, treating this information as trade secrets. This obligation extends beyond the termination of the agreement.
Specifically, the franchisee is restricted from divulging confidential information to anyone except employees who need it to operate the Baya Bar franchise. Even then, employees must be fully trained on the restrictions regarding the use of Baya Bar's proprietary information. This ensures that the brand's trade secrets and operational methods remain protected, preventing unauthorized use or dissemination.
Moreover, the rights and obligations outlined in Article 18 of the franchise agreement, which likely contains further details on these covenants, survive the termination or expiration of the agreement. This extended protection is typical in franchising to safeguard the brand's competitive advantage and proprietary information. Prospective franchisees should carefully review Article 18 to fully understand the scope and duration of these post-termination obligations.