What is the consequence of a Burros Fries franchisee failing to maintain the confidentiality of Trade Secrets?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
F. Territory Alteration as an Alternative to Termination
If Franchisee is in default of the Franchise Agreement, as an alternative to termination, we may modify or completely eliminate any rights that Franchisee may have with respect to exclusivity in the Territory, effective ten (10) days after delivery of written notice to Franchisee.
24. FRANCHISEE'S OBLIGATIONS UPON TERMINATION OR EXPIRATION
A. Franchisee Shall Cease Using Names and Marks
Franchisee further agrees that, upon termination or expiration of this Agreement, Franchisee shall immediately and permanently cease to use, by advertising, or any manner whatsoever, any Confidential Information, methods, trade secrets, procedures, descriptions of Products and Services associated with us and the Names and Marks and any proprietary marks and distinctive forms, slogans, symbols, signage, logos or devices associated with the System. In particular, Franchisee shall cease to use, without limitation, all signage (this includes vehicles with graphics, if applicable), advertising materials, menus, stationery, forms and any other articles, which display the Names and Marks. Franchisee shall make or cause to be made, at its expense, changes directed by us in signage, vehicles (if applicable), building and structures so as to effectively distinguish the surviving business entity, if any, from itsformer appearance and from other existing Burros & Fries Businesses. Franchisee shall comply with the covenant not to compete and the agreement to maintain the confidentiality of proprietary information, as well as return all information that is considered to be Confidential Information under the terms and conditions of this Agreement back to us.
B. Franchisee Shall Cease Operating the Business & Refrain from Notifying Guests
Franchisee shall immediately cease to operate its Business and shall not thereafter, directly or indirectly, represent itself to the public or hold itself out as a present or former franchisee of ours.
In addition, Franchisee shall not give notice of termination or expiration of this Agreement to Franchisee's guests without our prior written consent. We shall have the sole right to notify all of Franchisee's guests of the termination or expiration of this Agreement at the time and manner we determine to be most appropriate. All existing guest and account lists of the Franchisee shall be our property.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, if a franchisee defaults on the Franchise Agreement, Burros Fries has the option to modify or completely eliminate any exclusivity rights the franchisee may have in their territory. This modification becomes effective ten days after written notice is delivered to the franchisee.
Additionally, upon termination or expiration of the Franchise Agreement, the franchisee must immediately and permanently cease using any Confidential Information, methods, trade secrets, procedures, and descriptions of Products and Services associated with Burros Fries. This includes refraining from using the Names and Marks, proprietary marks, distinctive forms, slogans, symbols, signage, logos, or devices associated with the Burros Fries system. The franchisee is also required to make changes to signage, vehicles, buildings, and structures to distinguish the business from its former appearance and from other Burros Fries businesses.
Furthermore, the franchisee must comply with the covenant not to compete and the agreement to maintain the confidentiality of proprietary information. All information considered Confidential Information under the terms of the Franchise Agreement must be returned to Burros Fries. The franchisee must also cease operating the business and cannot represent themselves as a current or former Burros Fries franchisee. They are also prohibited from notifying guests of the termination or expiration of the agreement without prior written consent from Burros Fries, which retains the sole right to notify guests in a manner it deems appropriate. All guest and account lists of the franchisee become the property of Burros Fries.