Does the Burros Fries franchise agreement include a schedule for a Confidentiality and Non-Compete Agreement?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
C. Franchisee Will Not Compete Against Franchisor
Franchisee specifically acknowledges that, pursuant to this Agreement, Franchisee will receive valuable specialized training, our Confidential Information and our System.
Franchisee agrees that, except as otherwise approved in writing by us, Franchisee shall not, during the term of this Agreement and for a period of two (2) years from the date of (i) a transfer permitted under this Agreement; (ii) the expiration or termination of this Agreement (regardless of the cause for termination); or (iii) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to the enforcement of this Section 19.C, either directly or indirectly for itself, or through, on behalf of, or in conjunction with, any person, persons, or legal entity, own, maintain, operate, engage in, be employed by, or have any interest in any business using any aspect of the System, the overall Burros & Fries business concept, with similar Products and/or Services within a ten (10) mile radius of the Accepted Location designated hereunder, or within a ten (10) mile radius of any other System franchise or company-owned business in existence or planned as of the time of termination or expiration of this Agreement as identified in the Franchise Disclosure Document in effect as of the date of expiration or termination of this Agreement.
The unenforceability of all or part of this covenant not to compete in any jurisdiction will not affect the enforceability of this covenant not to compete in any other jurisdictions, or the enforceability of the remainder of this Agreement. This covenant not to compete is given in part in specific consideration for access to trade secrets provided as a part of our training or ongoing support programs. In any jurisdiction in which the covenant contained in this Section 19 or any part of it is deemed not enforceable in whole or in part, Franchisee hereby grants us an option to purchase Franchisee's Business on expiration or termination of this Agreement. In such case, we may exercise this option by giving thirty (30) days' written
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
Based on the 2024 Burros Fries Franchise Disclosure Document, the franchise agreement does include provisions for confidentiality and non-compete, although not explicitly as a 'schedule.' The agreement outlines specific terms and conditions related to these aspects.
The confidentiality clause mandates that franchisees protect Burros Fries's proprietary information, including trade secrets, strategies, recipes, techniques, and operational procedures, both during and after the agreement term. This obligation extends to the franchisee's owners, officers, directors, agents, employees, and independent contractors. Franchisees must take necessary steps to prevent unauthorized disclosure of this information, ensuring it remains confidential.
The non-compete clause restricts franchisees from engaging in similar businesses during the agreement term and for a period of two years after termination, transfer, or a final order from an arbitrator or court. This restriction applies within a ten-mile radius of the franchisee's location or any other existing or planned Burros Fries franchise. This covenant is in consideration for the specialized training and confidential information provided to the franchisee. The franchisor also retains the option to purchase the franchisee's business if the non-compete clause is deemed unenforceable in a particular jurisdiction.
Additionally, the franchise agreement includes an Individual Guaranty, which requires guarantors to uphold the franchisee's obligations, including non-competition, indemnity, and non-disclosure provisions. This guaranty ensures that even if the franchisee is a corporate entity, individuals are personally responsible for adhering to these critical terms. These measures collectively aim to protect Burros Fries's competitive advantage and proprietary information.