What steps must I take to protect Checkersrallys' confidential information?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
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; 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 Checkersrallys's 2025 Franchise Disclosure Document, franchisees have several obligations regarding the brand's confidential information, both during and after the franchise term. Checkersrallys will disclose confidential information, including trade secrets, solely for use in operating the franchised business. Franchisees must exert their best efforts to maintain the confidentiality of this information, regardless of its format.
Specifically, franchisees cannot use the confidential information in any other business or capacity, as this would be considered an unfair method of competition. Unauthorized copies of any confidential information are prohibited. Franchisees must also implement all commercially reasonable procedures prescribed by Checkersrallys to prevent unauthorized use or disclosure. This includes requiring managers, assistant managers, and any personnel attending training or having access to confidential information to sign nondisclosure agreements in a form prescribed or approved by Checkersrallys, and then delivering those agreements to Checkersrallys.
Upon termination or expiration of the franchise agreement, franchisees must immediately cease using all confidential information and return all copies of the Operations Manual and any other confidential materials provided by Checkersrallys. Franchisees also agree not to communicate, divulge, or use Checkersrallys' confidential information for the benefit of any other person or entity during or after their term. This includes information related to ingredients, recipes, site selection, marketing programs, supplier information, operating results, inventory control methods, computer systems, and any other information designated as proprietary or confidential. These measures are in place to protect Checkersrallys' competitive advantage and proprietary business methods.
These obligations are typical in franchising, as franchisors need to protect their intellectual property and trade secrets. Prospective Checkersrallys franchisees should carefully review these requirements and ensure they have the resources and commitment to comply with them. Failure to do so could result in legal action or termination of the franchise agreement.