Do the Browns Chicken franchisee's obligations regarding Confidential Information survive the termination or expiration of the Franchise Agreement?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Confidential Information.
Franchisee agrees that upon termination or expiration of the Franchise, it will immediately cease to use any Confidential Information of Brown disclosed to Franchisee pursuant to this Agreement in any business or otherwise and will return to Brown all copies of the Operating Manual and other confidential materials which have been lent to it by Brown.
14. CONFIDENTIAL INFORMATION.
A. Brown possesses certain unique, confidential and proprietary information and trade secrets, including but not limited to the following categories of information, methods, techniques, procedures, and knowledge developed by Brown and/or its franchisees (the "Confidential Information"): (1) recipes, methods, procedures and techniques for preparing, packaging, serving and delivering chicken and other food products; (2) methods, techniques, specifications, procedures, information, systems and knowledge of and experience in the development, operation and franchising of BROWN'S Stores; (3) marketing programs; and (4) methods of training of managers and other personnel.
B. Brown will disclose the Confidential Information to Franchisee during training, in the Operating Manual and in guidance and assistance furnished to Franchisee during the term of the Franchise. Franchisee acknowledges and agrees that he will not acquire any interest in the Confidential Information, other than the right to utilize it in the operation of the Store and that the use or duplication of the Confidential Information in any other business would constitute an unfair method of competition with Brown and other BROWN'S franchises.
C. Franchisee acknowledges and agrees that the Confidential Information is a valuable asset of Brown, includes trade secrets of Brown and is disclosed to Franchisee solely on the condition that Franchisee agrees, and Franchisee does hereby agree, that he: (1) will not use the Confidential Information in any other business or capacity; (2) will maintain the absolute secrecy and confidentiality of the Confidential Information during and after the term of this Agreement; (3) will not make unauthorized copies of any portion of the Confidential Information disclosed in written form; and (4) will adopt and implement all reasonable procedures prescribed from time to time by Brown to prevent unauthorized use or disclosure of the Confidential Information, including without limitation, restrictions on disclosure thereof to employees of Franchisee, and the use of Brown's customary non-disclosure and/or non-competition clauses in employment agreements with employees who have access to the Confidential Information.
In connection with this obligation, Franchisee shall notify Brown of the name and address of each affiliate, officer, director, partner, supervisory employee and owner of Franchisee and shall update such information whenever necessary.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the franchisee's obligations regarding confidential information survive the termination or expiration of the Franchise Agreement. Specifically, the franchisee must cease using any of Browns Chicken's confidential information immediately upon termination or expiration and return all copies of the operating manual and other confidential materials.
Browns Chicken considers its confidential information a valuable asset and includes trade secrets. This information is disclosed to the franchisee solely under the condition that the franchisee agrees to maintain its absolute secrecy and confidentiality both during and after the term of the agreement. The franchisee also agrees not to use the confidential information in any other business or capacity and to implement procedures to prevent unauthorized use or disclosure.
Furthermore, the franchisee must notify Browns Chicken of the name and address of each affiliate, officer, director, partner, supervisory employee, and owner of the franchisee, updating this information as necessary. These individuals must also sign a confidentiality and noncompetition agreement, reinforcing the franchisee's responsibility to protect Browns Chicken's confidential information even after the franchise agreement ends. These measures ensure that Browns Chicken can protect its proprietary information and maintain a competitive edge in the market.