Under the Chicken Guy agreement, what obligation does the Potential Franchisee have regarding the treatment of Confidential Information?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
As a consequence of Potential Franchisee's acquisition or anticipated acquisition of Confidential Information, Potential Franchisee will occupy a position of trust and confidence with respect to Chicken Guy's affairs and business. In view of the foregoing, Potential Franchisee agrees that it is reasonable and necessary that Potential Franchisee agree, while this Agreement is in effect, to the following:
- **A.
No Disclosure.** Potential Franchisee shall use the Confidential Information solely for purposes of evaluating whether or not Potential Franchisee will purchase a Franchise.
Potential Franchisee shall not disclose the Confidential Information to any person or entity other than Potential Franchisee's attorney, accountant or other representatives as necessary to evaluate the opportunity provided by Chicken Guy and agree to protect the Confidential Information against unauthorized disclosure using the same degree of care, but no less than a reasonable degree of care, as Potential Franchisee uses to protect Potential Franchisee's confidential information.
Potential Franchisee represents that it has its own procedures in place to assure that its representatives are aware of their obligations to retain in confidence any Confidential Information they receive.
Without in any way limiting the generality of Potential Franchisee's obligations under this Agreement, Potential Franchisee acknowledges and agrees that in no event will Potential Franchisee disclose any of the Confidential Information to any of Chicken Guy's competitors.
- **B.
No Use, Copying or Transfer.** Potential Franchisee shall not use, copy or transfer Confidential Information in any way and shall protect the Confidential Information against unauthorized use, copying or transfer using the same degree of care, but no less than a reasonable degree of care, as Potential Franchisee uses to protect Potential Franchisee's confidential information.
Potential Franchisee further agrees not to remove, overprint, or deface any notice of copyright, trademark, logo, or other notices of ownership from any Confidential Information.
- **C.
Applicability.** These covenants shall apply to all Confidential Information disclosed to Potential Franchisee by Chicken Guy prior to the date of this Agreement.
- **D.
Return and/or Destruction of Confidential Information.** If, at any time, Chicken Guy determines that it does not wish for Potential Franchisee to purchase a Franchise or Potential Franchisee determines that it does not wish to purchase a Franchise, or if Chicken Guy requests, at any time and for any reason, that Potential Franchisee do so, Potential Franchisee agrees to: (1) immediately cease to use the Confidential Information; (2) immediately return, or destroy the Confidential Information and all copies thereof (whether or not such copies were authorized) and cause any third party to whom disclosure was made to do the same; and (3) at the request of Chicken Guy, certify in writing that Potential Franchisee and all others to whom Potential Franchisee has provided such Confidential Information, have complied with subsections (1) and (2) above.
- E. Injunctive Relief. Potential Franchisee understands that any violation of this Agreement will cause Chicken Guy immediate and irreparable harm which money damages cannot adequately remedy. Therefore, upon any actual or impending violation of this Agreement, Potential Franchisee hereby consents to issuance by the federal or state court having jurisdiction where Chicken Guy's principal offices are located or, at Chicken Guy's election, any other court that may, assume jurisdiction, of any restraining order, preliminary and/or permanent injunction, without bond, restraining or enjoining such violation by Potential Franchisee or any entity or person acting in concert with Potential Franchisee. Potential Franchisee understands that such orders are additional to and do not limit the availability of any other remedy.
- 3. Waiver. Potential Franchisee acknowledges that no waiver by Chicken Guy of any breach by Potential Franchisee of any provision of this Agreement shall be deemed a waiver of any preceding or succeeding breach of the same or any other provision of this Agreement. No such waiver shall be effective unless in writing and then only to the extent expressly set forth in writing.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to the 2025 Chicken Guy FDD, a Potential Franchisee, as a consequence of acquiring or anticipating the acquisition of Confidential Information, acknowledges a position of trust and confidence with respect to Chicken Guy's business. While the agreement is in effect, the Potential Franchisee must adhere to specific covenants regarding this information. The Potential Franchisee is obligated to use the Confidential Information solely for evaluating the potential purchase of a franchise and must not disclose it to any person or entity, except their attorney, accountant, or other representatives, as necessary for evaluating the opportunity. They must protect the Confidential Information against unauthorized disclosure using at least a reasonable degree of care, equivalent to the protection of their own confidential information. The Potential Franchisee also confirms that they have procedures to ensure their representatives are aware of their obligations to maintain confidentiality. Importantly, the Potential Franchisee is prohibited from disclosing any Confidential Information to Chicken Guy's competitors.
Furthermore, the Potential Franchisee is prohibited from using, copying, or transferring Confidential Information in any way and must protect it against unauthorized use, copying, or transfer, again using at least a reasonable degree of care. They also agree not to remove, overprint, or deface any copyright, trademark, logo, or other ownership notices from any Confidential Information. These covenants apply to all Confidential Information disclosed to the Potential Franchisee by Chicken Guy prior to the agreement date. If Chicken Guy determines that it does not wish for Potential Franchisee to purchase a Franchise or Potential Franchisee determines that it does not wish to purchase a Franchise, or if Chicken Guy requests, at any time and for any reason, that Potential Franchisee do so, Potential Franchisee agrees to: (1) immediately cease to use the Confidential Information; (2) immediately return, or destroy the Confidential Information and all copies thereof (whether or not such copies were authorized) and cause any third party to whom disclosure was made to do the same; and (3) at the request of Chicken Guy, certify in writing that Potential Franchisee and all others to whom Potential Franchisee has provided such Confidential Information, have complied with subsections (1) and (2) above.
Chicken Guy emphasizes that any violation of the agreement could cause immediate and irreparable harm that money damages cannot adequately remedy. Therefore, the Potential Franchisee consents to the issuance of restraining orders, preliminary and/or permanent injunctions, without bond, to prevent any violation of the agreement. These orders are in addition to any other available remedies. The FDD also states that no waiver by Chicken Guy of any breach by Potential Franchisee of any provision of this Agreement shall be deemed a waiver of any preceding or succeeding breach of the same or any other provision of this Agreement. No such waiver shall be effective unless in writing and then only to the extent expressly set forth in writing.
This emphasis on confidentiality is standard practice in franchising, as franchisors like Chicken Guy need to protect their proprietary information and trade secrets. Prospective franchisees should carefully review these confidentiality obligations to understand the extent of their responsibilities and potential liabilities.