What is the Buona franchisee's obligation regarding the confidentiality of the System as defined in the franchise agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
13.2 Maintenance of Confidential Information. During the Term, and after the expiration or termination of this Agreement, Franchisee must use its best efforts to protect the Confidential Information. Accordingly, Franchisee must not communicate, divulge, or use for the benefit of any other person, persons or entity, any part of the Confidential Information. Franchisee may divulge such Confidential Information only to such employees of Franchisee who must have access to it in order to carry out Franchisee's obligations under this Agreement, and as may be required by law, provided Franchisee shall give Franchisor prior written notice of any such required disclosure by law immediately upon receipt of notice by Franchisee in order for Franchisor to have the opportunity to seek a protective order or take such other actions as it deems appropriate under the circumstances. Franchisor reserves the right to require Franchisee, or any of its owners, officers, partners, principals, managers, and employees having access to the Confidential Information to execute a confidentiality agreement or similar instrument(s) containing restrictions as those provided in this Section and, as applicable, throughout this Agreement. Such requirement shall not create an employee or joint employee relationship between Franchisor and Franchisee's employees, nor does it constitute control by Franchisor over Franchisee's employment matters.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees have specific obligations regarding the confidentiality of the Buona system, both during the term of the franchise agreement and after its expiration or termination. The agreement defines "Confidential Information" as any non-public information relating to Buona or its system. This includes manuals, operational standards, recipes, marketing materials, accounting systems, and any other know-how related to operating and marketing the Buona restaurant. Customer information is also considered confidential.
During the franchise term and even after the agreement ends, franchisees must use their best efforts to protect this Confidential Information. They are prohibited from communicating, divulging, or using it for the benefit of any other person or entity. Disclosure is only permitted to employees who need the information to fulfill their obligations under the agreement or when required by law. In the event of a legally required disclosure, the franchisee must provide Buona with prior written notice to allow Buona to seek a protective order or take other appropriate actions.
Buona retains the right to require franchisees, their owners, officers, managers, and employees to sign confidentiality agreements. The franchisee's duty to maintain confidentiality extends beyond the termination of the franchise agreement. This obligation ensures that the Buona's proprietary information remains protected, preventing unfair competition and maintaining the integrity of the Buona system. Franchisees acknowledge that their knowledge of Buona's processes and the system is derived from information disclosed by Buona and that this information is proprietary and confidential.