After the Burros Fries franchise agreement terminates, can the franchisee disclose Confidential Information?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
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- All documentation of the information listed in Section 16.A including, without limitation, our training program and Operations Manual. During the term of this Agreement and for a period of five (5) years following the expiration or termination of this Agreement, Franchisee agrees not to use, divulge, directly or indirectly, any Confidential Information, without our prior written consent.
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 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.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, franchisees are restricted from disclosing Confidential Information both during the term of the Franchise Agreement and for a specified period after its termination or expiration. Specifically, franchisees agree not to use or divulge any Confidential Information for five years following the expiration or termination of the agreement, without prior written consent from Burros Fries. This restriction covers a broad range of information, including operating procedures, food preparation methods, product knowledge, pricing strategies, and financial characteristics of the Burros Fries system.
The definition of Confidential Information is extensive, encompassing strategies for site acquisition, build-out specifications, proprietary recipes, food preparation techniques, purchasing strategies, inventory management systems, and employee training programs. Franchisees must take necessary steps to protect this information and only release it to individuals with a need to know, such as employees, agents, and independent contractors. This obligation extends beyond the agreement's term, reinforcing the importance of maintaining confidentiality even after the franchise relationship ends.
Upon termination or expiration of the Franchise Agreement, franchisees must immediately cease using any Confidential Information, methods, trade secrets, or procedures associated with Burros Fries. This includes refraining from using the brand's names and marks, as well as any proprietary marks, slogans, symbols, signage, logos, or devices associated with the system. Franchisees are also required to make changes to signage, vehicles, and buildings to effectively distinguish their business from its former appearance as a Burros Fries franchise.
These confidentiality obligations are crucial for protecting Burros Fries's competitive advantage and proprietary information. Prospective franchisees should carefully review the definition of Confidential Information in the Franchise Agreement and understand the restrictions on its use and disclosure, both during and after the franchise term. Compliance with these provisions is essential to avoid potential legal consequences and to maintain a positive relationship with Burros Fries.