Does Big Apple Bagels require the use of non-disclosure and non-competition clauses in employment agreements?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
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, Big Apple Bagels requires franchisees to use non-disclosure and non-competition clauses in employment agreements. Specifically, the FDD states that franchisees must implement restrictions on disclosing proprietary information to employees, and that these agreements should name Big Apple Bagels as a third-party beneficiary. This requirement aims to protect Big Apple Bagels' trade secrets and confidential information by preventing unauthorized use or disclosure by the franchisee's employees or agents.
This requirement has several implications for prospective Big Apple Bagels franchisees. First, franchisees must incorporate these clauses into their employment agreements, potentially incurring legal costs to ensure compliance with applicable laws. Second, franchisees must actively enforce these clauses to protect the franchisor's proprietary information. Failure to do so could result in liability for breaches of confidentiality by their employees.
Non-disclosure and non-competition agreements are common in franchising to protect brand standards, trade secrets, and customer relationships. The enforceability of non-competition clauses can vary by state, so franchisees should consult with legal counsel to ensure their agreements are compliant with local laws. For example, the FDD includes addenda for North Dakota and California, noting that non-competition covenants may be unenforceable in those states. Therefore, franchisees need to be aware of the specific regulations in their state to ensure the clauses are enforceable.