What procedures must a Checkers franchisee implement to prevent unauthorized use or disclosure of Confidential Information?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
constitutes grounds for termination of this Agreement, as provided in Section 14.
7. RESTRICTIVE COVENANTS.
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;
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, franchisees must implement commercially reasonable procedures to prevent unauthorized use or disclosure of confidential information. These procedures are those that Checkers prescribes from time to time. Specifically, franchisees must require any personnel who attend training or have the ability to access Checkers' confidential information to sign nondisclosure agreements in a form that Checkers prescribes or approves. These agreements must then be delivered to Checkers.
This requirement ensures that individuals with access to sensitive business information are legally bound to protect it. By mandating nondisclosure agreements, Checkers aims to minimize the risk of confidential information being leaked or misused, which could harm the brand's competitive advantage. The franchisee is responsible for ensuring that all relevant personnel sign these agreements and that the agreements are properly submitted to Checkers.
The FDD also defines "Confidential Information" as Checkers' proprietary and confidential information relating to the development and operation of Restaurants, including: ingredients, recipes, and methods of preparation and presentation of food products Checkers authorizes; site selection criteria for Restaurants and plans and specifications for the development of Restaurants; sales, marketing and advertising programs and techniques for Restaurants; identity of suppliers, and knowledge of specifications and pricing for food products, materials, supplies and equipment, Checkers authorizes; knowledge of operating results and financial performance of Restaurants, other than the Franchised Restaurant and other Restaurants the franchisee owns; methods of inventory control, storage, product handling, training and management relating to Restaurants; computer systems and software programs; and any and all other information Checkers provides the franchisee, their 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.
In addition to these measures, the franchisee must also comply with data privacy and security requirements and exert commercially reasonable efforts to prevent the unauthorized use, dissemination, or publication of customer data, subject to applicable laws. If the franchisee becomes aware of any unauthorized access to customer data or any related legal proceedings, they must promptly notify Checkers. These comprehensive measures reflect the importance of safeguarding both Checkers' proprietary information and customer data to maintain the integrity and competitiveness of the franchise system.