Besides carrying out obligations under the Franchise Agreement, under what other condition can a party disclose Cinnaholic's proprietary or confidential information?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) Developer and each Bound Party agree that while this Agreement remains in effect such party will not, directly or indirectly, disclose or publish to any party, or copy or use for such party's own benefit, or for the benefit of any other party, any of Franchisor's proprietary or confidential information, except as required to carry out Developer's obligations under this Agreement or as Franchisor has otherwise expressly approved in writing. All proprietary and confidential information of Franchisor is the sole and exclusive property of Franchisor. Developer and each Bound Party agree that the restriction contained in the preceding sentence will remain in effect with respect to the confidential information for five years following termination or expiration of this Agreement for any reason; provided, however, if the confidential information rises to the level of a trade secret, then such restriction shall remain in effect until such time as the information does not constitute a trade secret. Developer also agrees that it and all of its employees and agents will take appropriate steps to protect Franchisor's confidential information from any unauthorized disclosure, copying or use. At any time upon Franchisor's request, and in any event upon termination or expiration of this Agreement, Developer will immediately return any copies of documents where there are materials containing confidential information and will take appropriate steps to permanently delete and render unusable any confidential information stored electronically.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees and other bound parties are prohibited from disclosing Cinnaholic's proprietary or confidential information. However, this restriction does not apply if Cinnaholic has expressly approved the disclosure in writing. This means that while franchisees are generally bound to secrecy regarding the brand's confidential information, they can disclose it if they obtain explicit written permission from Cinnaholic.
This provision protects Cinnaholic's trade secrets and confidential business information, which are critical to maintaining a competitive edge in the market. By requiring written approval for any disclosure, Cinnaholic retains control over how its sensitive information is shared and used. This is a fairly standard practice in franchising, as franchisors need to protect their intellectual property and operational methods.
For a prospective Cinnaholic franchisee, this means understanding the importance of confidentiality and adhering strictly to the terms of the franchise agreement regarding proprietary information. It also highlights the need to maintain clear communication with Cinnaholic and to seek written authorization before disclosing any information that could be considered confidential or proprietary. Failing to do so could result in a breach of contract and potential legal consequences.