Does the Chesters franchise agreement require franchisees to use non-disclosure agreements with those having access to confidential information?

According to Chesters's 2025 Franchise Disclosure Document, franchisees are not explicitly required to use non-disclosure agreements (NDAs) with individuals who have access to the franchisor's confidential information. However, Chesters's FDD states that franchisees must take reasonable steps to prevent improper disclosure and should use NDAs with those who have access to confidential information. This suggests that while NDAs are not mandated, they are strongly recommended as a means of protecting Chesters's proprietary information.

Chesters considers its manuals and other materials to contain confidential information, some of which constitutes trade secrets. This information is crucial to the operation of a Chesters franchise, and franchisees are responsible for maintaining the confidentiality of these materials. Franchisees must keep the manuals at the restaurant and ensure they are up to date. In case of a dispute over the contents of the manuals, Chesters's master copies will be the controlling reference.

While Chesters does not explicitly mandate NDAs, the responsibility to take "reasonable steps" to prevent disclosure places an onus on the franchisee to actively protect Chesters's confidential information. Using NDAs with employees or others who have access to this information would likely be viewed as a reasonable step. Prospective franchisees should clarify with Chesters what specific measures they expect franchisees to take to safeguard confidential information and whether they provide templates or guidance for implementing NDAs.