Does the Buona franchisor's right to require confidentiality agreements from the franchisee's personnel create an employment relationship?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
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 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the franchisor's right to require confidentiality agreements from the franchisee's personnel does not create an employment or joint-employment relationship. Buona reserves the right to require franchisees, their owners, officers, partners, principals, managers, and employees with access to confidential information to sign confidentiality agreements. These agreements contain restrictions similar to those outlined in the franchise agreement.
This provision ensures that Buona can protect its confidential information and trade secrets, which are crucial to maintaining the brand's standards and operational consistency. Confidential information includes the Buona System, operational standards, recipes, marketing materials, and other proprietary knowledge. By requiring confidentiality agreements, Buona aims to prevent the unauthorized disclosure or use of this information, which could harm the franchise system.
For a prospective Buona franchisee, this means that while they are responsible for ensuring their employees protect Buona's confidential information, the franchisor's requirement for confidentiality agreements does not make Buona a direct employer of the franchisee's staff. The franchisee retains control over their employment matters, including hiring, firing, and managing their employees. This arrangement is typical in franchising, where the franchisor sets standards and protects its brand, while the franchisee manages the day-to-day operations and personnel.