During the term of the Cinnabon franchise agreement, what are franchisees and their Owners prohibited from doing with Confidential Information or Trade Secrets?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that the Confidential Information and Trade Secrets provide you with a competitive advantage, that they will be economically valuable to you in the development of your Franchised Business, and that gaining access to Confidential Information and Trade Secrets is therefore a primary reason why you are entering into this Agreement.
You specifically agree that these restrictions are applicable even before you open the Franchised Business since you will receive valuable information and training about the System and the operation of the Franchised Business before you begin operations of your Franchised Business.
You agree that you are liable under this provision even if you do not open the Franchised Business as this Agreement requires.
Accordingly, in consideration of our disclosure of the Confidential Information and Trade Secrets, you agree that:
- A.
You and your Owners will not, during the Term:
(i) appropriate or use any Confidential Information or any Trade Secret for any purpose other than in accordance with this Agreement;
(ii) disclose or reveal any portion of the Confidential Information or any Trade Secret to any person, other than to your directors, officers, Owners, management employees, or others who: (a) have a legitimate business need to know of it to operate your Franchised Business, (b) are aware of the confidentiality restrictions in this Agreement, and (c) are similarly bound not to disclose the Confidential Information by an agreement at least as restrictive as the terms of this Agreement; or
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, franchisees and their owners are restricted from specific actions regarding Confidential Information and Trade Secrets during the term of the agreement. Franchisees and their owners cannot appropriate or use any Confidential Information or any Trade Secret for any purpose outside the scope of the agreement. They are also prohibited from disclosing or revealing any portion of the Confidential Information or any Trade Secret to any person.
However, there are exceptions to the disclosure restriction. Disclosure is permitted to the franchisee's directors, officers, owners, management employees, or others who have a legitimate business need to know the information to operate the franchised business. These individuals must be aware of the confidentiality restrictions outlined in the agreement and must also be bound by an agreement that is at least as restrictive as the terms of the Cinnabon franchise agreement.
These restrictions are applicable even before the Cinnabon franchised business opens, as franchisees receive valuable information and training about the Cinnabon system and the operation of the franchised business prior to commencement of operations. The franchisee remains liable under these provisions, even if they do not open the franchised business as required by the agreement, due to the disclosure of Confidential Information and Trade Secrets by Cinnabon.