To what extent can a Bombs Away franchisee disclose Confidential Information to its employees?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
any prosecution or defense of any Action related to possible infringement of or by the Marks.
- 12.4 Name. If Franchisee is an entity, it shall not use the words "Bombs Away" or any confusingly similar words in its legal name.
ARTICLE 13. COVENANTS
13.1 Confidential Information. With respect to all Confidential Information, Franchisee shall (a) adhere to all procedures prescribed by Bombs Away Franchising for maintaining confidentiality, (b) disclose such information to its employees only to the extent necessary for the operation of the Business; (c) not use any such information in any other business or in any manner not specifically authorized in writing by Bombs Away Franchising, (d) exercise the highest degree of diligence and effort to maintain the confidentiality of all such information during and after the term of this Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized disclosure or use of Confidential Information. Franchisee acknowledges that all Confidential Information is owned by Bombs Away Franchising (except for Confidential Information which Bombs Away Franchising licenses from another person or entity). This Section will survive the termination or expiration of this Agreement indefinitely.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, a franchisee can disclose confidential information to its employees only to the extent necessary for the operation of the business. The franchisee must adhere to all procedures prescribed by Bombs Away Franchising for maintaining confidentiality.
This means that franchisees must be very careful about what information they share with their employees. They should only share information that is absolutely necessary for the employee to do their job. For example, an employee might need to know the recipe for a particular product or the location of certain equipment. However, they would not need to know sensitive financial information or marketing plans.
The franchisee is responsible for ensuring that their employees also maintain the confidentiality of the information. This can be done through training, policies, and procedures. The franchisee must also exercise the highest degree of diligence and effort to maintain the confidentiality of all such information during and after the term of the Franchise Agreement. This obligation survives the termination or expiration of the agreement indefinitely. The franchisee must also promptly report any unauthorized disclosure or use of Confidential Information.
Bombs Away also requires that if requested, a franchisee will cause its general manager and other key employees to sign Bombs Away Franchising's then-current form of confidentiality and non-compete agreement (unless prohibited by applicable law).