Upon termination of the Alloy Franchise Agreement, must the franchisee continue to comply with the confidentiality provisions?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
You and your Owners, officers, directors, shareholders, partners, members and managers (if any) acknowledge that your entire knowledge of the operation of an ALLOY Facility and the System, including the knowledge or know-how regarding the specifications, standards and operating procedures of the services and activities, is derived from information we disclose to you and that certain information is proprietary, confidential and constitutes our trade secrets. The term "trade secrets" refers to the whole or any portion of know-how, knowledge, methods, specifications, processes, procedures and/or improvements regarding the business that is valuable and secret in the sense that it is not generally known to our competitors and any proprietary information contained in the Manuals or otherwise communicated to you in writing, verbally or through the Internet or other online or computer communications, and any other knowledge or knowhow concerning the methods of operation of the Facilities. You and your Owners, officers, directors, shareholders, partners, members and managers (if any), jointly and severally, agree that at all times during and after the term of this Agreement, you will maintain the absolute confidentiality of all such proprietary information and will not disclose, copy, reproduce, sell or use any such information in any other business or in any manner not specifically authorized or approved in advance in writing by us. We may require that you obtain nondisclosure and confidentiality agreements in a form satisfactory to us from the individuals identified in the first sentence of this paragraph and other key employees.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, franchisees and their owners, officers, directors, shareholders, partners, members, and managers acknowledge that their knowledge of the Alloy facility operation and system is derived from information disclosed by Alloy and that certain information is proprietary, confidential, and constitutes Alloy's trade secrets. This includes know-how, knowledge, methods, specifications, processes, procedures, improvements, proprietary information in manuals, and other knowledge concerning the operation methods of the facilities.
The Alloy Franchise Agreement states that franchisees and related parties jointly and severally agree to maintain absolute confidentiality of all proprietary information at all times during and after the term of the agreement. They are prohibited from disclosing, copying, reproducing, selling, or using any such information in any other business or manner not specifically authorized or approved in writing by Alloy.
This means that even after the Alloy Franchise Agreement terminates, the franchisee is still legally bound to protect Alloy's confidential information and trade secrets. This obligation extends to anyone who has access to this information through the franchisee, such as business partners or managers. Alloy may also require these individuals to sign separate confidentiality agreements. This is a standard practice in franchising to protect the franchisor's intellectual property and competitive advantage.