Does Big Apple Bagels require restrictions on disclosure of Proprietary Information to employees?
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.
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to the 2025 Big Apple Bagels FDD, franchisees (referred to as "Developers" in the document) are required to implement restrictions on the disclosure of proprietary information to their employees. Big Apple Bagels mandates that franchisees adopt and implement reasonable procedures to prevent unauthorized use or disclosure of the franchisor's proprietary information. These procedures include restrictions on disclosing information to employees and the use of non-disclosure and non-competition clauses in employment agreements. The franchisor also requires that they be named as an intended third-party beneficiary in these agreements.
This requirement ensures that the sensitive and confidential information that is crucial to the Big Apple Bagels system is protected. This includes trade secrets, operational methods, recipes, marketing strategies, and other intellectual property. By mandating these restrictions, Big Apple Bagels aims to maintain a competitive advantage and protect its brand integrity.
For a prospective Big Apple Bagels franchisee, this means they must incorporate specific clauses into their employee agreements to safeguard proprietary information. They will need to ensure that their employees understand the importance of confidentiality and the consequences of unauthorized disclosure. Additionally, franchisees must follow any specific procedures prescribed by Big Apple Bagels to prevent information leaks, which may involve training programs or security protocols. Failure to comply with these requirements could result in legal repercussions or damage to the Big Apple Bagels brand.