Under what circumstances can a Buona franchisee divulge Confidential Information to their employees?
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 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee may disclose Confidential Information to their employees under specific conditions. During the term of the agreement, and even after its expiration or termination, the franchisee must exert their best effort to protect Buona's Confidential Information. This means they cannot communicate, divulge, or use any part of the Confidential Information for the benefit of any other person or entity.
The franchisee can only share Confidential Information with employees who need access to it to fulfill the franchisee's obligations under the Franchise Agreement. Additionally, disclosure may be required by law, but the franchisee must provide Buona with prior written notice immediately upon receiving notice of such required disclosure. This allows Buona the opportunity to seek a protective order or take other appropriate actions.
Buona also reserves the right to require the franchisee, its owners, officers, partners, principals, managers, and employees with access to Confidential Information to sign a confidentiality agreement. This agreement would contain restrictions similar to those outlined in the Franchise Agreement. It is important to note that this requirement does not create an employee or joint-employee relationship between Buona and the franchisee's employees, nor does it give Buona control over the franchisee's employment matters. This is a fairly standard clause in franchise agreements to protect the franchisor's intellectual property and trade secrets.