Can Americas Best Value Inn require a franchisee's employees to execute a non-disclosure agreement?
Americas_Best_Value_Inn Franchise · 2025 FDDAnswer from 2025 FDD Document
All Confidential Information furnished to you by us or on our behalf, whether orally or by means of written material (i) shall be deemed proprietary, (ii) shall be held by you in strict confidence, (iii) shall not be copied, disclosed or revealed to or shared with any other person except to your employees or contractors who have a need to know such Confidential Information for purposes of this Agreement and who are under a duty of confidentiality no less restrictive than your obligations hereunder, or to individuals or entities specifically authorized by us in advance, and (iv) shall not be used in connection with any other business or capacity. You will not acquire any interest in any of our Confidential Information other than the right to use it as we specify in operating your Hotel during the Term. You agree to adopt and implement reasonable procedures to prevent unauthorized access, use or disclosure of Confidential Information, including by establishing reasonable security and access measures and restricting its disclosure to key personnel. We reserve the right to require that any employee, agent, or independent contractor that you hire execute a non-disclosure agreement to protect the Confidential Information. We reserve the right to regulate the form of non-disclosure agreement that you use and to be a third-party beneficiary of those agreements with independent enforcement rights. You acknowledge that any form of non-disclosure agreement that we require you to use, provide to you, or regulate the terms of, may or may not be enforceable in a particular jurisdiction. You agree that you are solely responsible for obtaining your own professional advice with respect to the adequacy of the terms and provisions of any confidentiality agreement that your employees, agents, and independent contractors sign.
Source: Item 23 — RECEIPTS (FDD pages 71–223)
What This Means (2025 FDD)
According to the 2025 Americas Best Value Inn Franchise Disclosure Document, Americas Best Value Inn does reserve the right to mandate that a franchisee's employees, agents, or independent contractors sign a non-disclosure agreement to safeguard confidential information. This measure allows Americas Best Value Inn to protect its proprietary information and maintain brand consistency across all franchise locations.
Americas Best Value Inn also retains the authority to regulate the specific form of the non-disclosure agreement and to be named as a third-party beneficiary, granting them independent enforcement rights. This ensures that the agreements meet Americas Best Value Inn's standards and that they can directly enforce these agreements if necessary. However, the FDD also acknowledges that the enforceability of any non-disclosure agreement may vary by jurisdiction, adding a layer of complexity for franchisees operating in different locations.
It is the franchisee's responsibility to seek professional legal advice to ensure that the terms and provisions of any confidentiality agreement are adequate and enforceable in their specific jurisdiction. This requirement underscores the importance of franchisees understanding their legal obligations and taking proactive steps to protect both their interests and those of Americas Best Value Inn. This also means that the franchisee bears the risk and cost of ensuring compliance with local laws regarding non-disclosure agreements.