Does the obligation to maintain the confidentiality of All Team's confidential information continue after the Franchise Agreement terminates?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
retains the right to pre-approve FRANCHISEE's use of linking and framing between FRANCHISEE's Web pages and all other Web sites. FRANCHISEE shall, within five (5) days after a request by ATFC, dismantle any frames and links between FRANCHISEE's Web pages and any other Web sites.
X. TRADE SECRETS
FRANCHISEE shall not, during the term of this Agreement, or after termination, expiration of the Agreement or Transfer, communicate or divulge to anyone, any information or knowledge concerning the products, services, standards, procedures, techniques, sales information, profit margins, marketing procedures, expansion plans, clients, rates, fees and terms and other information or material which ATFC may designate as confidential, including the Confidential Operations Manual, nor shall FRANCHISEE disclose or divulge in whole or in part any trade secrets or operating procedures of ATFC or its affiliates, customer lists, sales and promotional information, employee lists, financial information furnished or disclosed to FRANCHISEE by ATFC and any other information with respect of ATFC, unless such information is generally known and in the public domain, and except to the extent necessary to operate the Agency ("Confidential Information"). All employees of FRANCHISEE will exercise the highest degree of diligence and make every effort to maintain the absolute confidentiality of all trade secrets and proprietary rights during and after the term of this Agreement, and shall require all supervisory personnel to execute a Confidentiality and Non-Compete Agreement in a form acceptable to ATFC.
XI. NON-COMPETITION
A. Competing Business During the Term of This Agreement. FRANCHISEE acknowledges that ATFC is making its knowledge, know-how, and expertise available to it for the purpose of operating the Agency strictly and solely within the Area. FRANCHISEE agrees that it would be an unfair method of competition to use or duplicate or to allow others to use or duplicate any of the knowledge, know-how and expertise received by FRANCHISEE for any reason other than for the operation of the Agency under this Agreement. FRANCHISEE further recognizes the importance of devoting substantial time and energy to Agency.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD page 27)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the obligation to maintain the confidentiality of trade secrets and proprietary information extends beyond the termination of the Franchise Agreement. Specifically, franchisees must exercise a high degree of diligence to maintain the absolute confidentiality of all confidential information, trade secrets, and proprietary rights both during and after the term of the agreement. This obligation also applies to all employees of the franchisee, who must also sign a Confidentiality and Non-Competition Agreement.
This means that even after an All Team franchise closes or the agreement expires, the franchisee and their employees are legally bound to protect All Team's confidential information. This includes not disclosing or using any information about All Team's products, services, standards, procedures, techniques, sales information, profit margins, marketing procedures, expansion plans, clients, rates, fees, terms, customer lists, sales and promotional information, employee lists, and financial information. The only exception is for information that is already generally known and in the public domain.
The continuation of confidentiality obligations after termination is a standard practice in franchising to protect the franchisor's proprietary information and maintain a competitive advantage. Franchisees should understand that this obligation is a serious legal matter and that any breach of confidentiality could result in legal action from All Team. Franchisees should ensure that all employees are aware of and understand their confidentiality obligations, even after their employment with the franchise ends.
Furthermore, the Franchise Agreement states that the franchisee's obligations regarding trade secrets survive the termination, expiration, assignment, or transfer of the agreement. This reinforces the enduring nature of the confidentiality obligations and highlights the importance of safeguarding All Team's confidential information at all times.