What is Benihana's definition of 'Confidential Information' that franchisees are prohibited from divulging?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
18.3 Franchisee shall not, during the Franchise Term or thereafter, communicate, divulge, or use for the benefit of any other person, persons, partnership, association, limited liability company or corporation any confidential information, proprietary information, knowledge, or know-how concerning the Restaurant and the BENIHANA System, including, without limitation, recipes, products, proprietary formulations, technology, operational details, advertising techniques and any and all information, knowledge, know-how and techniques BNC designates as confidential, including the Operations Manual, the BENIHANA Standards and the BENIHANA System, which may be communicated to Franchisee or of which Franchisee may be apprised by virtue of Franchisee's training and/or operation of the Restaurant ("Confidential Information").
(a) Confidential Information shall not include information which Franchisee can demonstrate came to Franchisee's attention before BNC's disclosure; or which, at or after the time of disclosure by BNC to Franchisee, had become or later becomes a part of the public domain, through publication or communication by others.
Franchisee shall divulge the Confidential Information only to such of Franchisee's employees as must have access to it in order to operate the Restaurant.
- (b) As a condition of employment, Franchisee shall require Franchisee's General Manager and any personnel having access to any Confidential Information to execute covenants that they will maintain the confidentiality of information they receive in connection with their employment at the Restaurant.
Such covenants shall be in the form attached to this Agreement as Exhibit F, which form includes specific
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, franchisees are prohibited from divulging confidential information during the franchise term and thereafter. Confidential Information includes any confidential, proprietary information, knowledge, or know-how concerning the restaurant and the Benihana system. This encompasses recipes, products, proprietary formulations, technology, operational details, advertising techniques, and any information Benihana designates as confidential. Specifically, the Operations Manual, the Benihana Standards, and the Benihana System are included in this definition.
However, the agreement specifies certain exceptions to what constitutes Confidential Information. Information that the franchisee can demonstrate was already known to them before Benihana's disclosure, or information that becomes part of the public domain through publication or communication by others, is not considered confidential. Franchisees are only allowed to share Confidential Information with employees who need access to it for restaurant operations.
As a condition of employment, Benihana requires franchisees to ensure that their General Manager and any personnel with access to Confidential Information sign agreements to maintain confidentiality. These agreements must identify Benihana as a third-party beneficiary with the right to enforce them. Franchisees must provide Benihana with copies of these executed agreements within five days of hiring the relevant personnel. This ensures that Benihana can protect its trade secrets and proprietary information, which is standard practice in franchising to maintain brand consistency and competitive advantage.