Can Cicis regulate the form of employee confidentiality agreements?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
You and your owners will not acquire any interest in the Confidential Information other than the right to use it in operating the Restaurant. You must maintain the absolute confidentiality of the Confidential Information during and after the expiration or termination of the Franchise Agreement. You and your Owners, your employees and independent contractors must adopt and implement reasonable procedures to prevent unauthorized use or disclosure of the Confidential Information. You and your owners can divulge this Confidential Information only to individuals or entities specifically authorized by us in advance, or to your employees or contractors who must have access to it to operate the Restaurant, however, such individuals or entities must be under a duty of confidentiality no less restrictive than your obligations to us under the Franchise Agreement. We may require you to have your employees and contractors execute individual undertakings and shall have the right to regulate the form of and be a party to or third-party beneficiary under any such agreements. Neither you nor your owners are permitted to make unauthorized copies, record or otherwise reproduce the materials or information or make them available to any unauthorized person.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 42–43)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, Cicis has the right to regulate the form of employee confidentiality agreements. Cicis can require franchisees to have their employees and contractors execute individual undertakings. Cicis also has the right to regulate the form of and be a party to or third-party beneficiary under any such agreements.
This means that Cicis franchisees must ensure that their employees and contractors who have access to confidential information sign confidentiality agreements. These agreements must be in a form that Cicis approves. Cicis may also require to be a party to or a third-party beneficiary of these agreements, which would give Cicis the right to enforce the agreements directly against the franchisee's employees or contractors.
This requirement is intended to protect Cicis's confidential information and trade secrets. By requiring franchisees to have their employees and contractors sign confidentiality agreements, Cicis can help to prevent the unauthorized disclosure of its confidential information. This is a fairly standard practice in franchising, as franchisors need to protect their proprietary information and systems.
As a prospective franchisee, it is important to understand the scope of the confidential information covered by these agreements and the obligations that the agreements impose on employees and contractors. Franchisees should also be aware of the potential consequences of failing to comply with this requirement, which could include legal action by Cicis.