Under what circumstances is the restriction on disclosing Cinnaholic's confidential information indefinite?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the restriction on disclosing confidential information extends beyond the termination or expiration of the franchise agreement under specific conditions. Generally, franchisees and bound parties are restricted from disclosing Cinnaholic's proprietary or confidential information during the term of the agreement and for five years following its termination or expiration. This restriction includes not publishing, copying, or using the information for their own or another party's benefit, unless required to fulfill obligations under the agreement or expressly approved by Cinnaholic in writing. This encompasses all information within the Cinnaholic system, including data in operational manuals, which is presumed confidential.
However, the confidentiality restriction becomes indefinite if the confidential information qualifies as a trade secret. In this case, the restriction remains in effect until the information no longer constitutes a trade secret. This means that certain highly sensitive and valuable information, such as unique recipes or business strategies, are protected indefinitely as long as they maintain their status as trade secrets.
This extended protection for trade secrets is a standard practice in franchising to safeguard a brand's competitive advantage. Prospective Cinnaholic franchisees should understand that their obligation to protect trade secrets could last indefinitely, even after they are no longer associated with the franchise. This underscores the importance of maintaining strict confidentiality and adhering to Cinnaholic's guidelines for handling sensitive information.