What are the non-disclosure obligations regarding confidential information for a Black Bear Diner franchise?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
7. CONFIDENTIAL INFORMATION
7.1 Non-Disclosure of Confidential Information
Franchisee acknowledges and expressly agrees that (i) as between Franchisor and Franchisee, Franchisor is the sole owner of all Confidential Information, (ii) the Confidential Information now and hereafter provided or revealed to Franchisee pursuant to this Agreement (including in particular, but without limitation, the recipes and the contents of the Manual) are confidential trade secrets of Franchisor, (iii) such Confidential Information is being imparted to Franchisee only by reason of its special status as a Franchisee, (iv) the Confidential Information is not generally known to the food industry or public at large, (v) Franchisee shall acquire no interest in the Confidential Information, other than the right to utilize it during the term of this Agreement in the development and operation of the Franchised Restaurant, (vi) such Confidential Information shall be disclosed only to personnel of Franchisee on a "need to know basis", (vii) the use or duplication of the Confidential Information except as expressly permitted by this Agreement shall constitute an unfair method of competition and that Franchisor shall suffer irreparable injury thereby, and (iv) Franchisee shall adopt and implement all procedures as prescribed from time to time by Franchisor to prevent unauthorized use or disclosure of the Confidential Information.
For the avoidance of doubt, Franchisee is not precluded by this Agreement from contacting or otherwise engaging with governmental authorities regarding the franchise.
However, if/when Franchisee receives a valid legal order or is otherwise required by applicable laws to disclose any of Franchisor's Confidential Information to any governmental agency or court, Franchisee should promptly notify Franchisor in writing regarding such receipt of the request and provide a copy of the request and all relevant information regarding the request as it pertains to Franchisor's Confidential Information, including any specific required date for dissemination.
Before complying with the request, subject to any specific disclosure deadline in the request, Franchisee should provide Franchisor at least 14 days' time to review the request and, at Franchisor's election and cost, permit Franchisor to seek a protective order or other remedy with the requesting party.
Franchisee must provide Franchisor with reasonable assistance with any such action Franchisor elects to undertake.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, franchisees have specific obligations regarding confidential information, both during the term of the agreement and after its termination. Black Bear Diner considers itself the sole owner of all confidential information, including recipes and the contents of the manual, which are deemed confidential trade secrets. This information is provided to franchisees solely because of their special status as a franchisee and is not generally known in the food industry. Franchisees do not acquire any interest in the confidential information, other than the right to use it during the franchise term. Franchisees must disclose confidential information only to personnel on a "need to know basis" and must implement procedures to prevent unauthorized use or disclosure.
Black Bear Diner franchisees acknowledge that unauthorized use or duplication of confidential information constitutes unfair competition and causes irreparable harm to Black Bear Diner. Franchisees are obligated to adopt and implement procedures prescribed by Black Bear Diner to prevent unauthorized use or disclosure of confidential information. Upon termination or expiration of the franchise agreement, franchisees must cease using the confidential information, the system, and the marks associated with Black Bear Diner. They must also return the manual, all confidential information, and all other records and materials provided by Black Bear Diner.
There are exceptions to these non-disclosure obligations. Franchisees can engage with governmental authorities regarding the franchise. If legally required to disclose confidential information to a governmental agency or court, franchisees must promptly notify Black Bear Diner in writing and provide a copy of the request. Franchisees should provide Black Bear Diner at least 14 days to review the request and seek a protective order, with the franchisee's reasonable assistance. Black Bear Diner also reserves the right to require franchisees to enter into confidentiality agreements with certain individuals, including shareholders, officers, directors, employees and their spouses.