Is a Big Apple Bagels developer allowed to use the Proprietary Information in any other business?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Limitations on Developer's Use. Developer acknowledges and agrees that he will not acquire any interest in the Proprietary Information, other than the right to utilize it in the
development and operation of Stores pursuant to this Agreement, and that the use or duplication of the Proprietary Information in any other business would constitute an unfair method of competition. Developer acknowledges and agrees that the Proprietary Information is confidential and a trade secret of Franchisor and is disclosed to Developer solely on the condition that Developer agrees, and Developer does hereby agree, that he: (1) will not use the Proprietary Information in any other business or capacity; (2) will maintain the absolute confidentiality of the Proprietary Information during and after the term of this Agreement; (3) will not make unauthorized copies of any portion of the Proprietary Information disclosed in written, visual, or electronic form; and (4) will adopt and implement all reasonable procedures prescribed from time to time by Franchisor to prevent unauthorized use or disclosure of the Proprietary Information, including without limitation, restrictions on disclosure thereof to employees of BAGELS Stores and the use of nondisclosure and noncompetition clauses in employment agreements with employees and agents in the form prescribed by Franchisor, including naming Franchisor as an intended third party beneficiary.
- C.
Developer acknowledges and agrees that Franchisor would be unable to protect its trade secrets against unauthorized use of disclosure and would be unable to encourage a free exchange of ideas and information among BAGELS Stores if owners of BAGELS Stores were permitted to hold interests in any other bagel or coffee store business.
Developer acknowledges that Franchisor has granted the development rights to Developer herein set forth in part in consideration of, and in reliance upon, Developer's agreement to deal exclusively with Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, a developer is explicitly prohibited from using the Proprietary Information in any business other than the development and operation of Big Apple Bagels stores under the franchise agreement. The document emphasizes that the Proprietary Information is confidential and a trade secret of Big Apple Bagels.
The agreement specifies that the developer cannot use the Proprietary Information in any other business or capacity, must maintain its confidentiality during and after the agreement term, and cannot make unauthorized copies. They must also implement procedures to prevent unauthorized use or disclosure, including using non-disclosure and non-competition clauses in employment agreements. This ensures that the confidential information remains protected and is not used to unfairly compete with Big Apple Bagels.
Big Apple Bagels also states that it would be unable to protect its trade secrets if developers were allowed to hold interests in other bagel or coffee store businesses. The grant of development rights is contingent upon the developer's agreement to deal exclusively with Big Apple Bagels. This exclusivity clause reinforces the restriction on involvement in competing businesses and ensures the developer's focus remains solely on Big Apple Bagels' interests.