factual

What is the scope of the non-disclosure agreement for Associates regarding Fat Shack?

Fat_Shack Franchise · 2025 FDD

Answer 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:
    1. 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.

    1. 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, associates, including officers, partners, directors, managers, agents, employees, members, managing owners, designated managers, beneficial owners, or independent contractors, are required to sign a Nondisclosure and Noncompetition Agreement. This agreement is a prerequisite for associates to access any confidential information pertaining to Fat Shack, its operations, Fat Shack Restaurants, and the Licensed Methods. This requirement is a material term of the Franchise Agreement, designed to protect Fat Shack's confidential know-how, systems, designs, trade secrets, and proprietary rights.

The agreement specifically restricts associates from using or disclosing any confidential information, which Fat Shack considers valuable and unique, for personal benefit during their affiliation with the company and even after termination of their affiliation or the expiration/termination of the Franchise Agreement. Disclosure to any third party, including a Competitive Business, is prohibited without prior written consent from Fat Shack. Associates are also prohibited from copying or publishing the confidential information. Upon termination of their affiliation, all confidential information must be returned to Fat Shack or the company.

Furthermore, the agreement includes a noncompetition covenant that prevents associates, during their affiliation, from having any direct or indirect interest in a Competitive Business, or performing services for one, except when conducting company business as authorized by Fat Shack. This restriction applies whether the interest or service is direct or indirect, including through family members or separate business entities. Fat Shack emphasizes that unauthorized disclosure or use of confidential information would cause irreparable harm to the company, given the effort and resources invested in developing and protecting this information.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.