Does the Burros Fries franchisee have an obligation to ensure their employees do not disclose confidential information?
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.
Franchisee further agrees that it will not contest in any litigation, arbitration, mediation, or in any other manner our ownership rights to any or all of the above Confidential Information.
E. Maintain and Renovate the Business
Franchisee shall at all times maintain the Business in a clean, orderly condition and in first class repair in accordance with all maintenance and operating standards set forth in the Manual.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, franchisees have an obligation to protect the franchisor's confidential information and must take steps to ensure their employees do not disclose it. Burros Fries requires franchisees to prevent the release of confidential information to anyone without a need to know, including employees. This obligation extends both during the term of the Franchise Agreement and after its termination or expiration.
Confidential information includes strategies for site acquisition, build-out, design, and décor specifications, as well as distinctive products, services, proprietary recipes, sauces, and homemade ice cream. It also encompasses specific food preparation techniques, methods, procedures, standards, specifications, and purchasing strategies for all products, supplies, and kitchen equipment. Furthermore, confidential information includes inventory management systems, vendor 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, and 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.
Burros Fries franchisees must also keep methods of operations and Operations Manuals confidential, disclosing them only to employees, agents, and representatives who need access to them to operate the business. Franchisees are required to follow all security procedures, including executing and delivering necessary documents to Burros Fries. This is a fairly standard practice in franchising, as protecting trade secrets and confidential information is crucial for maintaining a brand's competitive edge and consistency across all locations.