What constitutes an unauthorized use or disclosure of Confidential Information regarding the Checkers franchise?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
7.01 Confidential Information. We will disclose parts of our Confidential Information to you solely for your use in the operation of the Franchised Restaurant. The Confidential Information is proprietary and includes our trade secrets. During and after the Term: (a) you may not use the Confidential Information in any other business or capacity (as you hereby acknowledge that such prohibited use would be an unfair method of competition); (b) you must exert your best efforts to maintain the
confidentiality of the Confidential Information, regardless of its format or medium of transmission to you; (c) you may not make unauthorized copies of any portion of the Confidential Information; and (d) you must implement all commercially reasonable procedures we prescribe at any time and from time to time to prevent unauthorized use or disclosure of the Confidential Information, including requiring any of your personnel who attends training or who has the ability to access our Confidential Information, to sign nondisclosure agreements in a form we prescribe or approve and delivering those agreements to us.
I agree that during the term of my employment by, ownership participation in, association with or service to Franchisee, or at any time thereafter, I will not communicate, divulge or use for the benefit of any other person, persons, partnership, proprietorship, association, corporation or entity, Franchisor's proprietary and confidential information relating to the development and operation of Restaurants, including but not limited to: (1) ingredients, recipes, and methods of preparation and presentation of food products Franchisor authorizes; (2) site selection criteria for Restaurants and plans and specifications for the development of Restaurants; (3) sales, marketing and advertising programs and techniques for Restaurants; (4) identity of suppliers, and knowledge of specifications and pricing for food products, materials, supplies and equipment, Franchisor authorizes; (5) knowledge of operating results and financial performance of Restaurants, other than those Restaurants Franchisee owns; (6) methods of inventory control, storage, product handling, training and management relating to Restaurants; (7) computer systems and software programs; and (8) any and all other information Franchisor provides to me, Franchisee, Franchisee's Owners or Affiliates that is designated orally or in writing as proprietary or confidential, or by its nature would reasonably be understood to be proprietary or confidential, regardless of whether such information is specifically designated as proprietary or confidential (collectively, all information referenced above, including examples (1) through (8), is known as the "Confidential Information"). Furthermore, any and all information, knowledge,
know-how, techniques and information which the entities mentioned above or their officers designate as confidential is considered (and hereby acknowledged by me as) Confidential Information for the purposes of this Agreement, except information which I can demonstrate came to my attention before disclosure or which had become or becomes a part of the public domain through publication or communication by others (unless the publication or communication violates a similar confidentiality agreement), but in no event through any act of mine.
You agree not to use such information, except in connection with your Franchised Restaurant in accordance with this Agreement.
You agree not to use, process, copy, display, publish, store or transfer the Customer Data without our approval.
You agree to comply with all applicable laws with respect to Customer Data; in addition, you agree to comply with our data privacy and security requirements and to exert commercially reasonable efforts to prevent the unauthorized use, dissemination, or publication of Customer Data, subject in all instances to applicable laws.
You shall promptly notify us if you become aware of any unauthorized access to the Customer Data, or if you become the subject of any governmental, regulatory, or other enforcement or private proceeding relating to your data handling practices of Customer Data.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, several actions constitute unauthorized use or disclosure of confidential information. This includes using the confidential information in any business other than the operation of the franchised Checkers restaurant, making unauthorized copies of the confidential information, or failing to implement commercially reasonable procedures to prevent unauthorized use or disclosure. Franchisees must also ensure their personnel who have access to confidential information sign non-disclosure agreements.
Confidential information encompasses a wide range of proprietary details related to the Checkers system. This includes, but is not limited to, ingredients, recipes, preparation methods, site selection criteria, marketing programs, supplier identities, operating results, inventory control methods, computer systems, and any other information designated as proprietary or confidential by Checkers. Franchisees are obligated to protect this information both during and after the term of their franchise agreement.
The agreement explicitly prohibits franchisees from communicating, divulging, or using confidential information for the benefit of any other person or entity. The franchisee also cannot store the information in a computer retrieval or database, nor otherwise make them available to any unauthorized person. This extends to preventing any competitive business from gaining access to Checkers' proprietary information, with the understanding that such actions could harm Checkers' protectable interests, trademarks, goodwill, and reputation.
Furthermore, franchisees are responsible for complying with data privacy and security requirements related to customer data. This includes preventing unauthorized use, dissemination, or publication of customer data and promptly notifying Checkers of any unauthorized access. Failure to adhere to these stipulations constitutes a breach of the franchise agreement and could result in legal action.