What efforts must a Checkers franchisee exert to maintain the confidentiality of the Confidential Information?
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.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, franchisees must exert their best efforts to maintain the confidentiality of the Confidential Information, regardless of its format or how it was transmitted. This obligation extends both during and after the term of the franchise agreement. Franchisees are prohibited from using the Confidential Information in any business other than their Checkers franchise, as such use would be considered an unfair method of competition.
To prevent unauthorized use or disclosure, Checkers franchisees must implement all commercially reasonable procedures prescribed by Checkers. A key component of this is requiring any personnel who attend training or have access to the Confidential Information to sign nondisclosure agreements. These agreements must be in a form prescribed or approved by Checkers, and franchisees are responsible for delivering the signed agreements to Checkers.
The Confidential Information includes, but is not limited to, ingredients, recipes, methods of food preparation, 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. This broad definition means franchisees must be vigilant in protecting a wide range of information related to the Checkers business. The franchisee also agrees not to use, process, copy, display, publish, store or transfer the Customer Data without Checkers's approval and to exert commercially reasonable efforts to prevent the unauthorized use, dissemination, or publication of Customer Data, subject in all instances to applicable laws.
These measures are typical in franchising to protect the franchisor's intellectual property and trade secrets. Prospective Checkers franchisees should carefully review the definition of Confidential Information and understand the specific procedures they will need to implement to comply with these confidentiality requirements. Failure to adequately protect this information could result in legal action and potential termination of the franchise agreement.