Who owns the proprietary and confidential information related to the Cinnaholic franchise?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- (i) Developer acknowledges and agrees that in connection with the operation of CINNAHOLIC® Bakeries and the CINNAHOLIC® System, Franchisor has developed at a great expense competitively sensitive proprietary and confidential information which are not commonly known by or available to the public. This proprietary and confidential information does not include any information that (a) is commonly known by or available to the public; (b) has been voluntarily disclosed to the public by Franchisor; (c) been independently developed or lawfully obtained by Developer; or (d) has otherwise entered the public domain through lawful means. All information which comprises the CINNAHOLIC® System including the information and data contained in any of Franchisor's operations manuals will be presumed to be confidential information of Franchisor.
- (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, the franchisor owns the proprietary and confidential information related to the Cinnaholic system. The FDD specifies that Cinnaholic has developed competitively sensitive proprietary and confidential information at great expense, which is not commonly known or available to the public. This information includes data contained in Cinnaholic's operations manuals.
The franchisee, referred to as the 'Developer' in the FDD, acknowledges that all proprietary and confidential information of Cinnaholic is the sole and exclusive property of Cinnaholic. The franchisee agrees not to disclose or use this information for their own benefit or the benefit of any other party, except as required to fulfill their obligations under the Franchise Agreement or with express written approval from Cinnaholic.
This restriction remains in effect during the term of the agreement and for five years following its termination or expiration. However, if the confidential information rises to the level of a trade secret, the restriction remains in effect as long as the information constitutes a trade secret. The franchisee must take steps to protect Cinnaholic's confidential information from unauthorized disclosure, copying, or use and must return or delete any documents or electronic storage containing confidential information upon request or termination of the agreement.
This clause is typical in franchise agreements to protect the franchisor's intellectual property and business methods. Prospective Cinnaholic franchisees should understand the scope of confidential information and the restrictions on its use and disclosure, both during and after the franchise term, as violations could lead to legal repercussions.