What is a Crave franchisee's obligation regarding confidential information provided by the franchisor?

(the "Agreement") is made and entered into this | |----------------------------------------------------------|------------------------------------------------------------------------------------------------| | | (the "Effective Date"), by CRAVE Franchising, LLC, a | | Wyoming limited liability company | , an individual, residing | | ("Franchisor"), and | | | at | ("Covenantor"), in connection with a franchise | | agreement executed by Franchisor and | ("Principal" and "Franchisee"). | WHEREAS, Franchisor and Franchisee are parties to a franchise agreement executed on or about the Effective Date hereof (the "Franchise Agreement"), whereby Franchisor has granted Franchisee the right to use certain trademarks, including, the registered trademark "CRAVE Hot Dogs Barbecue" and design mark, and certain proprietary products, services, promotions and methods (the "System") to establish and operate a Crave restaurant (the "Restaurant") pursuant to the System**;**

WHEREAS, Covenantor may have access to some or all of the confidential information, knowledge, know-how, techniques, contents of the Crave operations manual and other materials used in or related to the System and/or concerning the methods of operation of the System (collectively referred to as "Confidential Information");

WHEREAS, the Confidential Information provides economic advantages to Franchisor and licensed users of the System, including Franchisee;

WHEREAS, Franchisee has acknowledged the importance of restricting the use, access and dissemination of the Confidential Information, and Franchisee therefore has agreed to obtain from Covenantor a written agreement protecting the Confidential Information and further protecting the System against unfair competition; and

WHEREAS, Covenantor acknowledges that the execution of this Confidentiality and Non-Compete Agreement are in partial consideration for, and a condition to the granting of, the rights granted in the Franchise Agreement to Franchisee, and that Franchisor would not have granted these rights without the execution of this Confidentiality and Non-Compete Agreement by Covenantor.

NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, the parties agree as follows:

1. Confidentiality Agreement.

• a. Covenantor shall, at all times, maintain the confidentiality of the Confidential Information and shall not at any time disclose or permit the disclosure of the Confidential Information.
• b. Covenantor shall not at any time make copies of any documents or compilations containing some or all of the Confidential Information without Franchisor's express written permission.
• c. Covenantor shall surrender any material containing some or all of the Confidential Information to Franchisor, upon request, or upon termination of the Franchise Agreement.

d. Covenantor shall not at any time, directly or indirectly, do any act or omit to do any act that would or would likely be injurious or prejudicial to the goodwill associated with the System.

2. Covenants Not to Compete.

• a. In order to protect the goodwill and unique qualities of the System, and in consideration for the disclosure to Covenantor of the Confidential Information, Covenantor further agrees and covenants that during the term of the Franchise Agreement, Covenantor shall not, for Covenantor or through, on behalf of or in conjunction with any person or entity:
  • (i) divert, or attempt to divert, any business or customer of any Crave outlet or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise, or
  • (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any restaurant or food service business featuring menu items which are the same or substantially similar to those offered in the Crave System.
• b. In further consideration for the disclosure to Covenantor of the Confidential Information and to protect the goodwill and unique qualities of the System, Covenantor further agrees and covenants that, upon the termination of the Franchise Agreement and continuing for two (2) years thereafter, Covenantor shall not, for Covenantor or through, on behalf of or in conjunction with any person or entity:
  • (i) divert, or attempt to divert, any business or customer of any Crave outlet or of other franchisees in the Crave System to any competitor, by direct or indirect inducement or otherwise, or
  • (ii) participate as an owner, partner, director, officer, employee, or consultant or serve in any other managerial, operational or supervisory capacity in any restaurant or food service business featuring menu items which are the same or substantially similar to those offered in the Crave System within ten (10) miles of the Designated Territory or any Crave outlet location.

Source: Item 23 — RECEIPTS (FDD pages 63–253)