Is a Chicken Guy franchisee allowed to disclose any part of the System to someone who is not an employee?
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.
- (2) Franchisee shall not, during the term of this Agreement or at any time thereafter, communicate or disclose any trade secrets or confidential or proprietary information or know-how of the System to any unauthorized person, or do or perform, directly or indirectly, any other acts injurious or prejudicial to any of the Proprietary Marks or the System. Any and all information, knowledge, know-how and techniques, including all drawings, materials, equipment, specifications, recipes, techniques and other data that Chicken Guy or its affiliates designate as confidential, shall be deemed confidential for purposes of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, franchisees are explicitly prohibited from disclosing any part of the System to individuals who are not their employees. The FDD emphasizes that the Chicken Guy System, which includes trade secrets, confidential information, and proprietary know-how, is owned by Chicken Guy and gives them a competitive advantage. Franchisees must take measures to protect the confidentiality of this information.
Franchisees are only permitted to disclose parts of the System to their employees on a need-to-know basis. Furthermore, Chicken Guy may require franchisees to obtain a signed Confidential Disclosure Agreement from specific employees to ensure the protection of trade secrets and confidential information. This agreement would be in a form prescribed by Chicken Guy.
This strict confidentiality requirement extends beyond the term of the Franchise Agreement. Franchisees are not allowed to disclose any trade secrets or confidential information about the System to unauthorized individuals, even after the agreement ends. Unauthorized use or duplication of the System by a franchisee would be considered unfair competition, potentially leading to legal action, including injunctive relief, by Chicken Guy.