What is the duration of the non-disclosure obligation for Associates of a Southern Steer franchise after their employment or affiliation ends, specifically for Confidential Information that is not considered a Trade Secret?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) During the term of Associate's employment or affiliation with Franchisee and for a period of five years after the expiration or termination of such employment or affiliation (unless such information is a Trade Secret in which case the requirements will remain in place for as long as such information constitutes a trade secret), Associate will not at any time, reveal, communicate, sell, use, employ, copy, reverse engineer, imitate, lecture upon, rewrite, reproduce, disseminate, publish, disclose, or divulge, directly or indirectly, for its own benefit or otherwise, the Confidential Information or Trade Secrets, for Associate's own benefit or otherwise.
Source: Item 5 — and 7 of the FDD, Section 3.1 of the Franchise Agreement and Section 4.1 of the Multi-Unit Development Agreement are hereby amended to state that payment of the initial franchise fee and development fee will be deferred until We have satisfied Our pre-opening obligations, and You have commenced business operations. (FDD pages 168–290)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, an Associate's non-disclosure obligation regarding Confidential Information that is not considered a Trade Secret lasts for a period of five years after the termination or expiration of their employment or affiliation with the franchisee. This means that for five years post-employment, the Associate is prohibited from revealing, communicating, selling, using, or otherwise divulging Confidential Information related to the Southern Steer business.
This obligation is in place to protect Southern Steer's business operations and proprietary information. The FDD emphasizes that unauthorized disclosure would cause significant harm to Southern Steer, as they have invested considerable resources in developing their Confidential Information and Trade Secrets. This measure aims to prevent competitors from gaining access to sensitive information that could undermine Southern Steer's market position.
However, if the information qualifies as a Trade Secret, the non-disclosure requirements extend indefinitely, lasting as long as the information retains its status as a Trade Secret. This distinction highlights the importance of understanding what constitutes a Trade Secret versus general Confidential Information within the Southern Steer system. Franchisees should ensure their associates are well-informed about these obligations to avoid potential legal issues.
For a prospective franchisee, this clause underscores the need to carefully manage and monitor the flow of information within their Southern Steer franchise. It is crucial to ensure that all associates are aware of their non-disclosure obligations and the potential consequences of breaching them. This includes implementing training programs and internal controls to safeguard Confidential Information and Trade Secrets, thereby protecting the integrity and competitive advantage of the Southern Steer brand.