What is the role of the 'Associate' in relation to the confidential information of Fat Shack?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
plicable, the "Franchise Agreement").
- D. Associate is or will become involved with Company in the capacity of an officer, partner, director, manager, agent, employee, member, Managing Owner, Designated Manager (as defined in the Franchise Agreement), beneficial owner, or independent contractor (such capacities collectively referred to as "Affiliation") or is related to a person who has an Affiliation with Company, and will become privileged as to certain confidential information related to FSI, its operations, the FAT SHACK Restaurants and/or the Licensed Methods.
- E. FSI and Company require that Associate enter into this Agreement with them before Associate shall be allowed to have access to any confidential information of FSI (i) as a material term of the Franchise Agreement; (ii) in order to protect FSI's confidential know-how and distinctive systems, designs, décor, trade dress, specifications, standards, procedures and other trade secrets authorized or required by FSI for use in the operation of Company's FAT SHACK Restaurant; (iii) in order to protect FSI's proprietary rights in, and Company's right to use, the confidential information of FSI; and (iv) in consideration of Associate's Affiliation with Company.
- F. Associate, Company, and FSI have reached an understanding and agreement with regard to nondisclosure by Associate of confidential information and with respect to noncompetition by Associate with FSI and Company.
- NOW THEREFORE, in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Associate, Company and FSI, intending legally to be bound, agree as follows:
-
- Confidential Information. Associate recognizes and agrees that certain proprietary information relating to FSI and its operations ("Confidential Information") is owned by and treated as
confidential by FSI and Company, including without limitation, (1) the Licensed Methods; (2) all proprietary information concerning FSI's business, the FAT SHACK Restaurants, and the FAT SHACK Restaurant business format and operating procedures; (3) sales methods; (4) formulas, recipes, or processes related to any products sold at FAT SHACK Restaurants; (5) all financial information of FSI and Company other than financial information filed with any government regulatory agency; (6) information regarding the design, décor and layout of FAT SHACK Restaurants; (7) franchise sales processes and promotional methods and materials; (8) all nonpublic statistical information; (9) the strategic plan, budgets and projections for FSI; (10) all information concerning negotiations of any kind conducted by FSI whether pending or completed; (11) all marketing research data and marketing plans; (12) all lead generation or prospecting methods; (13) all information contained in FSI's operations manual, and any other manual, written instructional guides, or other nonpublic written information; (14) internal lists of FSI's current and former franchisees, area developers, and customers of FSI and its franchisees and area developers, including contact information such as physical addresses and e-mail addresses thereof; and (15) all other information which gives FSI and its affiliates an opportunity to obtain an advantage over their competitors or that may be considered a trade secret or proprietary and such Confidential Information that may be further developed from time to time by FSI. Such Confidential Information is unique, exclusive property and a trade secret of FSI.
-
- Use and Disclosure of Confidential Information. Associate acknowledges that, in connection with Associate's Affiliation with Company, FSI or Company will disclose in strict confidence certain Confidential Information necessary for the operation of a FAT SHACK Restaurant. Associate specifically acknowledges that the Confidential Information is valuable, unique and comprises a key portion of the assets of FSI;
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, an 'Associate' is someone involved with a Fat Shack franchisee company as an officer, partner, director, manager, employee, member, Managing Owner, Designated Manager, beneficial owner, or independent contractor, or is related to someone with such an affiliation. Due to this affiliation, the Associate may gain access to confidential information about Fat Shack.
To protect Fat Shack's confidential information, Fat Shack and the franchisee company require the Associate to enter into an agreement before being allowed access to any confidential information. This agreement is a material term of the Franchise Agreement, designed to protect Fat Shack's know-how, systems, designs, trade secrets, and proprietary rights. The agreement ensures that the Associate understands the confidential nature of the information and agrees not to disclose it.
The Associate acknowledges that this confidential information is valuable and a key asset of Fat Shack. The Associate agrees not to use the information for personal benefit during their affiliation with the franchisee company or at any time after the affiliation ends. They also agree not to disclose the information to any third party without Fat Shack's prior written consent. The Associate is prohibited from copying or duplicating the confidential information and must return it to Fat Shack or the franchisee company upon termination of their affiliation. The Associate can only disclose confidential information to other employees, agents, or representatives of Fat Shack or the franchisee company to the extent necessary for them to perform their duties.
The agreement also includes a non-competition covenant, preventing the Associate from having any direct or indirect interest in a competitive business during their affiliation, except when conducting the franchisee's business as authorized by Fat Shack and the franchisee company. Unauthorized disclosure or use of confidential information would be considered wrongful and cause irreparable harm to Fat Shack, as the company has invested significant resources in developing and protecting this information.