What rights do Restricted Persons acquire regarding Trade Secrets for Hck Hot Chicken?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may disclose certain of its Trade Secrets to Restricted Persons in the HCK Hot Chicken Brand Standards Manual, bulletins, supplements, confidential correspondence, or other confidential communications, and through the Franchisor's training program and other guidance and management assistance, and in performing Franchisor's other obligations and exercising Franchisor's rights under this Agreement. "Trade Secrets" shall not include information which: (a) has entered the public domain or was known to Franchisee prior to Franchisor's disclosure of such information to Franchisee, other than by the breach of an obligation of confidentiality owed (by anyone) to Franchisor or its Affiliates; (b) becomes known to the Restricted Persons from a source other than Franchisor or its Affiliates and other than by the breach of an obligation of confidentiality owed (by anyone) to Franchisor or its Affiliates; or (c) was independently developed by Franchisee without the use or benefit of any of the Franchisor's Trade Secrets.
The burden of proving the applicability of the foregoing will reside with Franchisee.
- 12.2.2 Each Restricted Person shall acquire no interest in the Trade Secrets other than the right to use them in developing and operating the Franchised Restaurant during the Term of this Agreement.
A Restricted Person's duplication or use of the Trade Secrets in any other endeavor or business shall constitute an unfair method of competition.
Each Restricted Person shall: (i) not use the Trade Secrets in any business or other endeavor other than in connection with the Franchised Restaurant; (ii) maintain absolute confidentiality of the Trade Secrets during and after the Term of this Agreement; and (iii) make no unauthorized copy of any portion of the Trade Secrets, including the HCK Hot Chicken Brand Standards Manual, bulletins, supplements, confidential correspondence, or other confidential communications, whether written or oral.
Franchisee shall operate the Restaurant and implement all reasonable procedures prescribed from time to time by Franchisor to prevent unauthorized use and disclosure of the Trade Secrets, including, implementing restrictions and limitations as Franchisor may prescribe on disclosure to employees and use of non-disclosure and noncompetition provisions in employment agreements with employees who may have access to the Trade Secrets.
Promptly upon Franchisor's request, Franchisee shall deliver executed copies of such agreements to Franchisor.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, Restricted Persons, as defined in the agreement, are granted specific rights regarding the use of the company's Trade Secrets. These individuals are permitted to use the Trade Secrets solely for the purpose of developing and operating the Franchised Restaurant during the term of the franchise agreement. This right is explicitly limited to this purpose, and no other interest in the Trade Secrets is conveyed.
This means that while franchisees and other restricted individuals have access to Hck Hot Chicken's confidential information necessary to run their restaurant, they cannot use this information for any other business ventures or personal gain. The agreement explicitly prohibits the duplication or use of Trade Secrets in any endeavor or business outside of the franchised restaurant, defining such actions as unfair competition. This restriction remains in effect both during and after the term of the franchise agreement, ensuring the continued protection of Hck Hot Chicken's proprietary information.
To further safeguard these Trade Secrets, Restricted Persons must maintain absolute confidentiality and are prohibited from making unauthorized copies of any portion of the Trade Secrets, including the HCK Hot Chicken Brand Standards Manual, bulletins, supplements, confidential correspondence, or other confidential communications, whether written or oral. Franchisees are also responsible for implementing reasonable procedures to prevent unauthorized use and disclosure of the Trade Secrets, including imposing restrictions on employees and using non-disclosure and non-competition agreements. This multifaceted approach ensures that Hck Hot Chicken's Trade Secrets are protected from misuse and unauthorized dissemination.