What administrative, physical, and technical safeguards must a Cream franchisee adopt and maintain to prevent unauthorized use or disclosure of Confidential Information?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
You and your owners will (and to use each of your best efforts to cause each of your respective current and former spouses, immediate family members, owners, officers, directors, employees, representatives, affiliates, successors and assigns to): (i) process, retain, use, collect, and disclose our Confidential Information strictly to the limited extent, and in such a manner, as necessary for the development and operation of your Shop in accordance with the Franchise Agreement; (ii) process, retain, use, collect, and disclose our Confidential Information strictly in accordance with the privacy policies and system standards we establish, and our and our representative's instructions; (iii) keep confidential and not disclose, sell, distribute, or trade our Confidential Information to any person other than those of your employees and representatives who need to know such Confidential Information for the purpose of assisting you in operating your Shop in accordance with the Franchise Agreement (you will be responsible for any violation of this requirement by any person to whom you provide Confidential Information); (iv) not make unauthorized copies of any of our Confidential Information; (v) adopt and maintain administrative, physical and technical safeguards to prevent unauthorized use or disclosure of any of our Confidential Information, including by establishing reasonable security and access
measures, restricting its disclosure to key personnel, and/or by requiring persons who have access to such Confidential Information to be bound by contractual obligations to protect such Confidential Information and preserve our rights and controls in such Confidential Information, in each case that are no less protective or beneficial to us than the terms of the Franchise Agreement (and we may designate or approve the form of confidentiality agreement that you will use); and (vi) at our request, destroy or return any of the Confidential Information. Confidential Information does not include information, knowledge, or know-how, which is lawfully known to the public without violation of applicable law or an obligation to us or our affiliates.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 40–42)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, franchisees must adopt and maintain administrative, physical, and technical safeguards to prevent unauthorized use or disclosure of Cream's Confidential Information. These safeguards include establishing reasonable security and access measures, restricting disclosure to key personnel, and requiring individuals with access to the confidential information to be bound by contractual obligations. These contractual obligations are designed to protect the confidential information and preserve Cream's rights and controls, ensuring the safeguards are no less protective than the terms outlined in the Franchise Agreement. Cream may also designate or approve the form of confidentiality agreement that franchisees must use.
In practical terms, a Cream franchisee will need to implement a comprehensive security plan. This plan should cover digital security (such as password protection, data encryption, and firewalls) and physical security (such as restricted access to sensitive documents and areas). The franchisee must also train employees on handling confidential information and ensure they understand their obligations. By limiting access to confidential information to only those employees who need it to perform their duties, the risk of unauthorized disclosure is reduced.
Furthermore, the franchisee is responsible for any violation of these confidentiality requirements by anyone to whom they provide Cream's Confidential Information. This underscores the importance of carefully vetting employees and representatives and ensuring they are fully aware of their obligations to protect Cream's proprietary information. The franchisee must also be prepared to destroy or return any Confidential Information at Cream's request, indicating that Cream retains ultimate control over its proprietary information even after it has been shared with the franchisee.