What are the exceptions to the confidentiality obligations for a Benihana franchisee regarding Confidential Information?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- (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.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, there are specific exceptions to the confidentiality obligations for franchisees. Benihana's confidential information includes recipes, products, proprietary formulations, technology, operational details, advertising techniques, the Operations Manual, Benihana Standards, and the Benihana System.
However, a Benihana franchisee is not bound to keep information confidential if they can demonstrate that the information was already known to them before Benihana disclosed it. Additionally, information that becomes part of the public domain through publication or communication by others, either at the time of disclosure or afterward, is also excluded from confidentiality obligations.
The franchisee is permitted to share confidential information with their employees, but only those who need access to it to operate the restaurant. Furthermore, the franchisee must ensure that these employees, particularly the 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, and copies of the executed agreements must be provided to Benihana within five days of hiring the relevant employees.