What rights does a Big Apple Bagels developer acquire regarding the Proprietary Information?
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 Big Apple Bagels' 2025 Franchise Disclosure Document, a developer does not acquire an ownership interest in the Proprietary Information. Instead, the developer obtains the right to use the Proprietary Information solely for the development and operation of Big Apple Bagels stores, as outlined in the agreement. This means the developer's usage of the information is restricted to activities directly related to running the franchised business.
The agreement explicitly states that using or duplicating the Proprietary Information for any other business venture is considered an unfair method of competition. The developer acknowledges that the Proprietary Information is confidential and a trade secret of Big Apple Bagels. Therefore, the developer must maintain absolute confidentiality both during and after the term of the agreement.
Furthermore, the developer is prohibited from making unauthorized copies of the Proprietary Information, whether it's in written, visual, or electronic form. They must also implement reasonable procedures to prevent unauthorized use or disclosure, including imposing restrictions on disclosing the information to employees and using non-disclosure and non-competition clauses in employment agreements, with Big Apple Bagels named as a third-party beneficiary. These measures ensure that the Proprietary Information remains protected and is only used for the benefit of the Big Apple Bagels franchise system.