What happens if a Bft franchisee violates the confidentiality obligations outlined in the agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee or Franchisee's employees or any independent contractors learn about an unauthorized use of any Confidential Information, Franchisee must promptly notify Franchisor. Franchisor is not obligated to take any action but will respond to the information as it deems appropriate. If Franchisee at any time conducts, owns, consults with, is employed by or otherwise assists a similar or competitive business to that franchised hereunder, the doctrine of "inevitable disclosure" will apply, and it will be presumed that Franchisee is in violation of this covenant; and in such case, it shall be Franchisee's burden to prove that Franchisee is not in violation of this covenant.
In the event of termination for any default of Franchisee, such sums shall include all damages, costs and expenses, including reasonable legal fees, incurred by Franchisor as a result of the default;
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
Based on the 2025 FDD, Bft outlines several stipulations regarding confidential information. If a Bft franchisee learns of any unauthorized use of confidential information, they must promptly notify Bft. However, Bft is not obligated to take any action but will respond to the information as it deems appropriate.
According to the FDD, if a franchisee conducts, owns, consults with, is employed by, or otherwise assists a similar or competitive business to that franchised under the agreement, the doctrine of "inevitable disclosure" will apply. In this case, it will be presumed that the franchisee is in violation of the confidentiality covenant. The franchisee then bears the burden of proving that they are not in violation.
Upon termination or expiration of the Franchise Agreement, the franchisee must cease using Bft's confidential information. In the event of termination due to the franchisee's default, the franchisee is liable for all damages, costs, and expenses, including reasonable legal fees, incurred by Bft as a result of the default. These terms highlight the importance Bft places on protecting its confidential information and the potential financial and legal repercussions for franchisees who fail to uphold these obligations.