What are the franchisee's obligations regarding the confidentiality of Buona's Confidential Information after the termination of the agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
h, at the time of disclosure thereof by Franchisor to Franchisee, had become a part of the public domain, through publication or communication by others; or which, after disclosure to Franchisee by Franchisor, becomes a part of the public domain, through publication or communication by others.
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.
XIV. COVENANTS
- 14.1 Franchisee's Best Efforts.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees are obligated to protect Buona's Confidential Information even after the franchise agreement expires or is terminated. This means a franchisee cannot communicate, share, or use any part of the Confidential Information for the benefit of any other person or entity. The only exceptions are for employees who need access to fulfill the franchisee's obligations under the agreement or if disclosure is required by law, in which case Buona must be notified in advance to seek a protective order.
Confidential Information includes anything not generally available to the public that relates to Buona or its system. This includes, but is not limited to, the manuals, operational standards, recipes, food preparation methods, marketing materials, and accounting systems. It also extends to customer information, lists, data, and records of the franchised business. The franchisee's obligation to maintain confidentiality applies to all Trade Secrets during and after the term of the agreement, and they cannot use such information in any other business without written authorization from Buona.
Franchisees must also return all copies of the manuals to Buona or destroy any electronic files containing the manuals upon termination of the agreement, or as otherwise directed by Buona. This obligation ensures that the franchisee does not retain any proprietary information that could be used to compete with Buona or to operate a similar business. The FDD emphasizes that the contents of the manuals and the franchisee's knowledge of Buona's processes are secret, unique, and confidential, containing trade secrets and proprietary material.
These post-termination confidentiality obligations are standard practice in franchising to protect the franchisor's intellectual property and competitive advantage. Prospective Buona franchisees should carefully review the definition of Confidential Information and understand the scope of their obligations to avoid any potential legal issues after the franchise agreement ends.