Under what conditions can a Gold Star franchisee disclose Confidential Material to employees?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Gold Star asserts trade secret protection for information contained in the Manual and other information about its chili products, recipes and formulations, the System and the Business (the "Confidential Material"), and pursuant to the Franchise Agreement you agree that the Confidential Material constitutes proprietary highly confidential trade secrets and that you will not use any of the Confidential Material except as necessary in the operation of the Franchise business in accordance with the Franchise Agreement. You also agree that you will not disclose, duplicate, license, sell or reveal any of the Confidential Material to any person, other than disclosure to one or more of your employees to the extent that the employee is required by his/her work in accordance with the Franchise Agreement to be familiar with relevant Confidential Material. You agree to keep confidential the Confidential Material, to obtain from each of your partners, shareholders, officers, directors, employees and agents an agreement to keep and respect these confidences and to be responsible for compliance by all of those persons with those agreements.
You must advise Gold Star promptly in writing if you learn of any claims made regarding, or unauthorized use of, any Confidential Material, whether by a Related Party or a third party. Gold Star is not obligated to take any action, but may take any action it deems appropriate. Gold Star is not obligated to indemnify you for expenses or damages in a proceeding involving any of the Confidential Information.
Source: Item 14 — Patents, Copyrights, and Proprietary Information (FDD pages 40–41)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees can disclose Confidential Material to their employees under specific conditions. This disclosure is permissible only to the extent that the employee requires familiarity with the relevant Confidential Material to perform their work in accordance with the Franchise Agreement. This means that franchisees must carefully assess which employees need access to confidential information based on their job responsibilities and the requirements outlined in the Franchise Agreement.
Furthermore, the franchisee is obligated to ensure that all employees, partners, shareholders, officers, directors, and agents agree to keep the Confidential Material confidential. The franchisee must obtain an agreement from these individuals to respect and maintain these confidences and is responsible for their compliance with these agreements. This highlights the importance of having proper confidentiality agreements in place with anyone who has access to Gold Star's proprietary information.
In the event that a franchisee becomes aware of any claims or unauthorized use of Confidential Material, whether by a related party or a third party, they must promptly advise Gold Star in writing. While Gold Star is not obligated to take any action, they reserve the right to take any action they deem appropriate. This clause emphasizes the franchisee's responsibility to protect Gold Star's Confidential Material and to report any potential breaches or misuse of this information.