Does the Beverly Anns Cookie Franchise Owner Agreement specify what constitutes 'proprietary and confidential information'?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
2. Non-Disclosure and Protection of Confidential Information.
- 2.1 Confidentiality. Under the Franchise Agreement, we will provide Franchisee with specialized training, proprietary trade secrets, and other Confidential Information relating to the establishment and operation of a franchised business. The provisions of the Franchise Agreement governing Franchisee's non-disclosure obligations relating to our Confidential Information are hereby incorporated into this Franchise Owner Agreement by reference, and Owners agree to comply with each obligation as though fully set forth in this Franchise Owner Agreement as a direct and primary obligation of Owners. Further, we may seek the same remedies against Owners under this Franchise Owner Agreement as we may seek against Franchisee under the Franchise Agreement. Any and all information, knowledge, know-how, techniques, and other data which we designate as confidential will also be deemed Confidential Information for purposes of this Franchise Owner Agreement.
- 2.2 Immediate Family Members. Owners acknowledge that they could circumvent the purpose of Section 2.1 by disclosing Confidential Information to an immediate family member (i.e., spouse, parent, sibling, child, or grandchild). Owners also acknowledge that it would be difficult for us to prove whether Owners disclosed the Confidential Information to family members. Therefore, each Owner agrees that he or she will be presumed to have violated the terms of Section 2.1 if any member of his or her immediate family uses or discloses the Confidential Information or engages in any activities that would constitute a violation of the covenants listed in Section 3, below, if performed by Owners. However, Owners may rebut this presumption by furnishing evidence conclusively showing that Owners did not disclose the Confidential Information to the family member.
Source: Item 23 — RECEIPTS (FDD pages 57–235)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, the Franchise Owner Agreement addresses confidential information. Section 2.1 states that Beverly Anns Cookie will provide franchisees with specialized training, proprietary trade secrets, and other confidential information related to establishing and operating the franchised business. The non-disclosure obligations outlined in the Franchise Agreement are incorporated into the Franchise Owner Agreement, making owners directly responsible for complying with these obligations. Beverly Anns Cookie can pursue the same legal remedies against owners as it can against franchisees for breaches of confidentiality. The agreement also states that any information, knowledge, know-how, techniques, and other data designated as confidential by Beverly Anns Cookie will be considered Confidential Information.
The Franchise Owner Agreement also addresses the confidentiality obligations of immediate family members. Owners are presumed to have violated the confidentiality terms if an immediate family member (spouse, parent, sibling, child, or grandchild) uses or discloses confidential information or engages in activities that would breach the non-compete covenants. However, the owner can rebut this presumption by providing conclusive evidence that they did not disclose the confidential information to the family member.
This clause is significant because it extends the confidentiality obligations beyond the franchisee to the individual owners and their immediate family members. This measure aims to prevent the circumvention of confidentiality agreements through family members. The presumption of violation places the burden on the owner to prove non-disclosure, which could be challenging. Prospective franchisees should carefully consider these obligations and ensure they can comply with the strict confidentiality requirements, including managing the behavior of their immediate family members regarding confidential business information.