Is a Checkers franchisee allowed to use Checkers' confidential information in an unauthorized manner?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 63–64)
What This Means (2025 FDD)
According to the 2025 Checkers Franchise Disclosure Document, franchisees are explicitly prohibited from using Checkers' confidential information in any unauthorized manner, both during and after the term of the franchise agreement. The FDD emphasizes that such unauthorized use would be considered an unfair method of competition. Franchisees must exert their best efforts to maintain the confidentiality of Checkers' proprietary information, regardless of how it is transmitted.
Checkers requires franchisees to implement commercially reasonable procedures to prevent unauthorized use or disclosure of confidential information. This includes ensuring that personnel who attend training or have access to confidential information sign nondisclosure agreements. These agreements must be in a form prescribed or approved by Checkers and delivered to them, ensuring that all parties understand their obligations regarding the protection of sensitive information.
The definition of confidential information is broad, encompassing various aspects of the Checkers business, including but 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. This comprehensive definition ensures that franchisees understand the full scope of information that must be protected. Franchisees acknowledge that any information designated as confidential by Checkers is indeed confidential, unless they can prove it was already public knowledge or came to their attention before disclosure by Checkers.