Does the non-disclosure obligation extend to Buns On Fire franchisee's employees?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
11.6 Non-Disclosure of Confidential Information
(i.) Franchisor and Franchisor's affiliates own all right, title, and interest in and to the Confidential Information. Franchisee will not, nor will Franchisee permit any person to, use or disclose any Confidential Information (including without limitation all or any portion of the Confidential Operations Manuals) to any other person, except to the extent necessary for Franchisee's professional advisors and Franchisee's employees to perform their functions in the operation of the Franchised Business. Franchisee acknowledges that your use of the Confidential Information in any other business would constitute an unfair method of competition with Franchisor and Franchisor's franchisees. Franchisee will be strictly liable to Franchisor for any unauthorized use or disclosure of Confidential Information by any employee, contractor, agent, representative or other person to whom Franchisee discloses Confidential Information,
regardless of fault, and shall indemnify and hold Franchisor harmless from any damages resulting from such unauthorized use or disclosure. Franchisee will take reasonable precautions to protect the Confidential Information from unauthorized use or disclosure and will implement any systems, procedures, or training programs that we require. At our request, Franchisee will require anyone who may have access to the Confidential Information to execute non-disclosure agreements in a form satisfactory to Franchisor that identifies Franchisor as a third-party beneficiary of such covenants with the independent right to enforce the agreement.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to Buns On Fire's 2025 Franchise Disclosure Document, the non-disclosure obligation does extend to the franchisee's employees. Specifically, the franchisee cannot allow any person to use or disclose confidential information, which includes the Confidential Operations Manuals, except when it is necessary for the franchisee's professional advisors and employees to perform their duties in operating the Buns On Fire franchised business.
The franchisee acknowledges that using confidential information in any business other than Buns On Fire would be an unfair method of competition. The franchisee is strictly liable to Buns On Fire for any unauthorized use or disclosure of confidential information by any employee, contractor, agent, representative, or other person to whom the franchisee discloses the information. This liability exists regardless of fault, and the franchisee must indemnify and hold Buns On Fire harmless from any damages resulting from unauthorized use or disclosure.
The franchisee is required to take reasonable precautions to protect confidential information from unauthorized use or disclosure, including implementing any systems, procedures, or training programs that Buns On Fire requires. At Buns On Fire's request, the franchisee must also ensure that anyone who may have access to confidential information executes non-disclosure agreements in a form satisfactory to Buns On Fire, which identifies Buns On Fire as a third-party beneficiary with the independent right to enforce the agreement. This ensures that Buns On Fire has direct recourse against individuals who violate the non-disclosure terms, even if they are not directly contracted with Buns On Fire.