What are the exceptions to the confidentiality requirements for a Black Bear Diner franchisee (Developer) regarding information disclosed by the Franchisor?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
any Mark as part of any corporate or trade name or with any prefix, suffix, or other modifying words, terms designs, or symbols, or in any modifying words, terms designs or symbols, or in any modified form, nor may Developer use any Mark, in connection with any business or activity, other than the business conducted by Developer pursuant to Franchise Agreement(s) entered into between Developer and Franchisor, or in any other manner not explicitly authorized in writing by Franchisor.
6.2 Confidential Information
Except as hereinafter provided, Developer shall not, during the term of this Agreement or at any time thereafter, communicate, divulge, or use for the benefit of any other person or entity any Confidential Information which may be communicated to Developer or of which Developer may be apprised by virtue of Developer's activities under this Agreement or any Franchise Agreement with Franchisor. Developer may divulge such Confidential Information only to such of its employees as deemed necessary by Developer, and to other third parties with the prior written approval of Franchisor. All information which Franchisor designates as confidential shall be deemed confidential for purposes of this Agreement, except information which Developer can demonstrate came to its attention by lawful means prior to disclosure thereof by Franchisor, or which, at or after the time of disclosure by Franchisor to Developer, had become or later becomes a part of the public domain, through publication or communication by others. At Franchisor's request, Developer shall require its employees and any other person to whom Developer wishes to disclose any Confidential Information of Franchisor to execute covenants that they will maintain the confidentiality of such information.
7. TRANSFERS
7.1 By Franchisor
This Development Agreement and all rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to the benefit of Franchisor's successors and assigns;
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, a Developer (franchisee) is bound to confidentiality regarding information received from the Franchisor, both during the agreement term and afterward. However, there are specific exceptions to this rule. The franchisee can disclose confidential information to employees if deemed necessary, and to other third parties, but only with the franchisor's prior written approval.
Information is not considered confidential if the franchisee can prove it was already known to them through lawful means before the franchisor's disclosure. Also, information that becomes public knowledge through no fault of the franchisee is not subject to confidentiality restrictions. Black Bear Diner can request that the franchisee's employees and other individuals who have access to confidential information sign agreements to maintain its confidentiality.
Additionally, if a franchisee is legally compelled by a governmental authority to disclose confidential information, they may do so under certain conditions. The franchisee should only disclose the required portion of the confidential information, make reasonable efforts to ensure it is treated confidentially, and provide the franchisor with a copy of all information disclosed to the governmental authority. These stipulations ensure that while franchisees must comply with legal requirements, they also take steps to protect Black Bear Diner's confidential information to the extent possible.