Does the Bee Organized franchisee's obligation to protect Know-How continue after the agreement expires?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
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. Franchisee agrees that the foregoing covenants shall also apply to: (a) Franchisee's Owners and Spouses and, that Franchisee's Owners and Spouses shall each execute and deliver to Franchisor the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1; and (b) Franchisee's directors, officers, employees and agents where disclosure of the Know-How was necessary for the operations of the Franchised Business and where such director, officer, employee and/or agent previously executed and timely delivered to Franchisor the Confidentiality Agreement in the form attached as Exhibit 2.
Source: Item 23 — RECEIPTS (FDD pages 54–218)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, the franchisee's obligation to protect the Know-How extends beyond the term of the franchise agreement. Franchisees agree that both during the term of the agreement, and after its expiration or termination, they must adhere to specific restrictions regarding the Know-How. These restrictions include not using the Know-How in any business other than the Bee Organized franchised business, maintaining its confidentiality, and preventing unauthorized copies or disclosures.
Specifically, franchisees must stop using the Know-How immediately upon the expiration, termination, or transfer of the agreement. These obligations also extend to the franchisee's owners, spouses, directors, officers, employees, and agents, particularly where disclosure of the Know-How was necessary for the operation of the franchised business. These individuals may also be required to sign confidentiality agreements.
This ongoing obligation to protect Know-How is a standard practice in franchising, as it safeguards the franchisor's proprietary information and competitive advantage. For a prospective Bee Organized franchisee, this means understanding that the duty to protect confidential information survives the termination or expiration of the franchise agreement. Failure to comply with these covenants could result in legal action, including injunctive relief, as any violation is considered to cause irreparable harm to Bee Organized and its other franchisees.