Does the confidentiality agreement for Burros Fries extend to proprietary information conceived by the franchisee?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
modifications to the restaurant must first be approved by us and are Franchisee's sole responsibility and expense.
D. Maintain Confidentiality of Proprietary Information
Neither Franchisee nor any of its Owners if you are an Entity, officers, directors, agents, employees or independent contractors, except as required in the performance of the duties contemplated by this Agreement, may disclose or use at any time, whether during the term of this Agreement or thereafter, any confidential and proprietary information disclosed to or known by Franchisee or any such person as a result of this Agreement. Such information, includes, but shall not be limited to our confidential matters and trade secrets such as our: strategies for site acquisition, build-out, design and décor specifications; distinctive Products, Services, proprietary recipes, sauces and home-made ice cream; specific food preparation techniques, methods, procedures including standards; specifications and purchasing strategies for all products, supplies and kitchen equipment; inventory management systems, vendors and supplier relationships, cost and pricing strategies, retail center setup, merchandising strategies, procedures for cleanliness, safety, sanitation and quality control; software, service methods and techniques, operational procedures, service standards, employee hiring, training and retention programs; menus, photographs of food, sales, advertising, marketing and promotional materials; forms, contracts, record keeping, reporting procedures and accounting methods, proprietary information conceived, originated, discovered, or developed by Franchisee or by any employee of Franchisee which is not generally known in the trade or industry about our Products or Services, including information relating to discoveries, ideas, production, purchasing, accounting, engineering, website development and design, marketing, merchandising or selling of Products and Services (collectively referred to as "Confidential Information" and further defined in Section 16.A of this Agreement).
Franchisee further acknowledges that the Confidential Information was unknown to Franchisee prior to negotiation for and execution of this Agreement and that the unique and novel combination of "know how," methods, processes and techniques developed by us and licensed to Franchisee for the operation of a Burros & Fries Business are particular to the food service industry conducted by your Business. Franchisee agrees to take all steps necessary, at Franchisee's expense, to protect the Confidential Information and shall not release it to any person that does not have a need to know, including employees,
agents and independent contractors, either during the term or after the termination or expiration of this Agreement without our prior written consent.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, the confidentiality agreement does extend to proprietary information conceived, originated, discovered, or developed by the franchisee. This means that any new ideas, inventions, or improvements related to Burros Fries's products or services that a franchisee comes up with are considered confidential information. This includes information relating to discoveries, ideas, production, purchasing, accounting, engineering, website development and design, marketing, merchandising or selling of Products and Services which is not generally known in the trade or industry about Burros Fries's Products or Services.
This has significant implications for a prospective Burros Fries franchisee. While franchisees may innovate and improve their business, they cannot disclose or use this information outside of the franchise system, either during the term of the agreement or after its termination. This ensures that all innovations benefit the Burros Fries system as a whole and prevents franchisees from using proprietary knowledge to compete independently.
The franchisee must take necessary steps to protect this confidential information at their own expense and not release it to anyone without prior written consent from Burros Fries. This obligation extends both during the term of the agreement and after its termination or expiration. This clause is designed to protect Burros Fries's competitive advantage and maintain uniformity across all franchise locations.
In practical terms, a franchisee needs to be very careful about documenting and sharing any new ideas or processes they develop. All such information should be treated as confidential and only shared with authorized personnel within the Burros Fries organization. Franchisees should also ensure that their employees, agents, and independent contractors are aware of these confidentiality obligations and take appropriate measures to prevent unauthorized disclosure.