Is Americas Best Value Inn a third-party beneficiary of non-disclosure agreements with a franchisee's employees?
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 reserves the right to be a third-party beneficiary of non-disclosure agreements that a franchisee establishes with their employees. Specifically, Americas Best Value Inn can regulate the form of the non-disclosure agreement and has independent enforcement rights.
This means that Americas Best Value Inn has the right to enforce the terms of confidentiality agreements between the franchisee and their employees, agents, or independent contractors. This is in place to protect the confidential information of Americas Best Value Inn, ensuring that it is not improperly disclosed or used.
However, the FDD also notes that the enforceability of these non-disclosure agreements may vary by jurisdiction, and it is the franchisee's responsibility to seek professional advice regarding the adequacy of the terms and provisions of any confidentiality agreement. This places the onus on the franchisee to ensure that the non-disclosure agreements they use are legally sound and enforceable in their specific location.
This clause benefits Americas Best Value Inn by providing an additional layer of protection for its confidential information and trade secrets. It also carries implications for franchisees, who must ensure their employee agreements align with Americas Best Value Inn's requirements and are legally compliant.