What constitutes an unfair method of competition regarding the Chicken Guy System?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) Franchisee acknowledges and agrees that: (a) Chicken Guy owns all right, title and interest in and to the System; (b) the System consists of trade secrets and confidential and proprietary information and know-how that gives Chicken Guy and its affiliates a competitive advantage; (c) Chicken Guy and its affiliates have taken all measures necessary to protect the trade secrets and the confidentiality of the proprietary information and know-how comprising the System; (d) all material or other information now or hereafter provided or disclosed to Franchisee regarding the System is disclosed in confidence; (e) Franchisee has no right to disclose any part of the System to anyone who is not an employee of Franchisee; (f) Franchisee will disclose to its employees only those parts of the System that an employee needs to know; (g) Franchisee will have a system in place to ensure its employees keep confidential Chicken Guy's trade secrets and confidential and proprietary information, and, if requested by Chicken Guy, Franchisee shall obtain from those of its employees designated by Chicken Guy an executed Confidential Disclosure Agreement in the form prescribed by Chicken Guy; (h) Franchisee will not acquire any interest in the System; and (i) Franchisee's use or duplication of the System or any part of the System in any other business would constitute an unfair method of competition, for which Chicken Guy would be entitled to all legal and equitable remedies, including injunctive relief, without posting a bond.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, using or duplicating the Chicken Guy System or any part of it in any other business constitutes an unfair method of competition. Chicken Guy retains the right to all legal and equitable remedies, including injunctive relief without posting a bond, if a franchisee engages in such activity. This is because Chicken Guy owns all rights to the System, which includes trade secrets, confidential information, and proprietary know-how that gives Chicken Guy a competitive advantage.
The Franchise Agreement specifies that franchisees have no right to disclose any part of the System to anyone who is not an employee, and even then, only those parts of the System that an employee needs to know. Franchisees must have a system in place to ensure employees keep Chicken Guy's trade secrets and confidential information secure. Franchisees also agree not to acquire any interest in the System itself.
These measures are in place to protect the Chicken Guy System and its proprietary information. Unauthorized use or disclosure of this information could significantly harm Chicken Guy's competitive position. The agreement also states that franchisees cannot operate or have an interest in a restaurant business that features chicken as a primary menu item (at least 20% of sales) or whose operation or trade dress is similar to the Chicken Guy System, both during the term of the agreement and for one year after termination or expiration.