What is the Cinnaholic franchisee's obligation to protect the Franchisor's confidential information?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) Franchisee 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 Franchisee'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.
Franchisee 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.
Franchisee 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, Franchisee 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 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, franchisees acknowledge that Cinnaholic has developed proprietary and confidential information critical to the Cinnaholic system. This information isn't publicly known and gives Cinnaholic a competitive edge. The confidential information includes data and information found in the Operations Manual. Franchisees must treat all components of the Cinnaholic system as confidential.
During the term of the Franchise Agreement, franchisees and all bound parties must not disclose, publish, copy, or use Cinnaholic's confidential information for their own or another party's benefit, unless required to fulfill their obligations under the agreement or with Cinnaholic's written approval. All confidential information remains Cinnaholic's exclusive property. This restriction extends for five years after the agreement terminates or expires. However, if the confidential information qualifies as a trade secret, the restriction remains in effect as long as it remains a trade secret.
Cinnaholic franchisees must take appropriate steps to protect Cinnaholic's confidential information from unauthorized disclosure, copying, or use by their employees and agents. Upon Cinnaholic's request or when the agreement ends, franchisees must return all copies of documents containing confidential information and permanently delete any electronically stored confidential information. Franchisees also agree to comply with the terms and conditions related to discontinuing operations of the Bakery and any other procedures in the Operations Manual established by Cinnaholic.
As a condition of the Franchise Agreement, each Bound Party of Franchisee must sign and deliver to Franchisor the Personal Covenants, agreeing to be bound personally by all the provisions of Sections 20.1, 20.2 and 20.3. Franchisees must also ensure that their employees who have access to confidential information execute a noncompetition, nonsolicitation, and/or nondisclosure agreement in the form prescribed by Cinnaholic.