Under what circumstances does information that Cinnabon discloses to a franchisee NOT fall under the definition of 'Confidential Information' or 'Trade Secret'?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
The terms "Confidential Information" and "Trade Secret" do not include: (i) information generally known to the public at the time we disclose it to you; (ii) information that becomes known to the public after we disclose it to you, unless it becomes known due to your breach of this Agreement or someone else's breach of a duty to maintain confidentiality; or (iii) information you can prove was within your legitimate and unrestricted possession at the time we disclosed it to you.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, certain information disclosed to a franchisee is excluded from the definitions of "Confidential Information" and "Trade Secret" under specific circumstances. This means that a franchisee would not be bound by the confidentiality obligations outlined in the franchise agreement for such information.
Specifically, information generally known to the public at the time Cinnabon discloses it to the franchisee is not considered confidential. Similarly, information that later becomes publicly known, provided it's not due to a breach of the agreement by the franchisee or another party with a duty to maintain confidentiality, is also excluded. Finally, information that the franchisee can prove they already legitimately possessed without restriction at the time of disclosure by Cinnabon is not subject to confidentiality restrictions.
This is a fairly standard clause in franchise agreements. It protects franchisees from being unduly restricted regarding information they already know or that is in the public domain. However, the burden of proof lies with the franchisee to demonstrate prior legitimate possession of the information. It also emphasizes the importance of maintaining confidentiality, as a breach could nullify the exception if the information becomes public due to that breach.