factual

What are the consequences if an Anago Subfranchisor discloses confidential information?

Anago Franchise · 2025 FDD

Answer from 2025 FDD Document

cause its Unit Franchisees to do so, at his or her sole cost and expense within 30 days of Franchisor's request.

ARTICLE 6 - MANUALS AND OTHER CONFIDENTIAL INFORMATION

Section 6.1 - Confidential Use

Subfranchisor will receive valuable training regarding the operation and maintenance of the Subfranchise Business, Unit Franchise Businesses and Confidential Information which are beyond the present skills, experience and knowledge of Subfranchisor, or any of its owners, principals, managers or employees. The Confidential Information provided by Franchisor in connection with this Agreement constitutes valuable, essential, necessary and indispensable information that Subfranchisor requires and every restriction imposed on Subfranchisor and its principals in this Article 6 constitutes measures necessary to maintain the identity, integrity and reputation of the System. Consequently, Subfranchisor and each of its principals, owners, managers and employees will at all times treat the Anago Manuals and any other Confidential Information as confidential, and will use best efforts to preserve the confidentiality of all Confidential Information. The Anago Manuals will, at all times, be kept in a secure area at Subfranchisor's offices. Subfranchisor will report the theft, loss or destruction of the Anago Manuals, or any portion of the Manuals, immediately to Franchisor. Upon the theft, loss or destruction of the Anago Manuals, a replacement set must be purchased by Subfranchisor from Franchisor at a cost of $500. Moreover, Subfranchisor agrees that designated portions of the Anago Manuals are "trade secrets" held and treated as "trade secrets" by Franchisor. Subfranchisor will strictly limit access to the Anago Manuals to Subfranchisor's employees, to the extent they have a "need to know" in order to perform their jobs. Subfranchisor will not at any time, without Franchisor's written consent, copy, record or otherwise reproduce any part of the Anago Manuals, nor otherwise make the Anago Manuals available to any

unauthorized person except as may be required by law, regulation or court order. All current and future principals, employees and agents of Subfranchisor involved in any manner with his or her Subfranchise Business and having access to the Anago Manuals or any other Confidential Information, are required to sign before Initial Subfranchisor Training or upon employment, a nondisclosure and noninterference agreement.

Section 6.2 - Sole Property of Franchisor

The Anago Manuals and other Confidential Information at all times is and remains the sole property of Franchisor. Subfranchisor acquires no right, title or interest to this property under this Agreement except to possess and use the Anago Manuals or other Confidential Information during the Term of, and subject to the restrictions contained in, this Agreement. Therefore, Subfranchisor is prohibited from altering, editing or changing the Anago Manuals or any part of thereof. All improvements, developments, derivative works, enhancements, or modifications to any Confidential Information (collectively, "Innovations") made or created by Subfranchisor, its employees, contractors or Unit Franchisees, whether developed separately or in conjunction with Franchisor, shall be owned solely by Franchisor. Subfranchisor represents, warrants, and covenants that its employees, contractors and Unit Franchisees are bound by written agreements assigning all rights in and to any Innovations developed or created by them to Subfranchisor. To the extent that Subfranchisor, its employees, contractors or Unit Franchisees are deemed to have any interest in such Innovations, Subfranchisor hereby agrees to assign, and does assign, all right, title and interest in and to such Innovations to Franchisor. To that end, Subfranchisorshall execute, verify, and deliver such documents (including, without limitation, assignments) and perform such other acts (including appearances as a witness) as Franchisor may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining, and enforcing such ownership rights in and to the Innovations, and the assignment thereof. Subfranchisor's obligation to assist Franchisor with respect to such ownership rights shall continue beyond the expiration or termination of this Agreement. In the event Franchisor is unable for any reason, after reasonable effort, to secure Subfranchisor's signature on any document needed in connection with the actions specified in this Section 6.2, Subfranchisor hereby irrevocably designates and appoints Franchisor and its duly authorized officers and agents as Subfranchisor's agent and attorney in fact, which appointment is coupled with an interest and is irrevocable, to act for and on Subfranchisor's behalf to execute, verify, and file any such documents and to do all other lawfully permitted acts to further the purposes of this Section 6.2 with the same legal force and effect as if executed by Subfranchisor. The obligations of this Section 6.2 shall survive any expiration or termination of this Agreement.

Subfranchisor agrees not to contest, directly or indirectly, Franchisor's ownership, title, right or interest in the Confidential Information or any other copyrights, trade secrets, methods, procedures or other intellectual property rights that are part of Franchisor's business or contest Franchisor's sole right to register, use or license others the right to use the Confidential Information, copyrights, trade secrets, methods, or any other intellectual property rights.

Section 6.3 - Periodic Revisions

Franchisor may revise and change the contents of the Anago Manuals and Subfranchisor expressly agrees to comply with each new or changed provision and shall implement and enforce all

such modifications, as applicable, in connection with each Unit Franchisee in the Area.

Source: Item 23 — RECEIPTS (FDD pages 62–298)

What This Means (2025 FDD)

According to Anago's 2025 Franchise Disclosure Document, subfranchisors receive valuable training and confidential information that is essential to maintaining the integrity of the Anago system. Subfranchisors must treat the Anago Manuals and other confidential information as confidential and use their best efforts to preserve its confidentiality. The Anago Manuals must be kept in a secure area at the subfranchisor's office, and any theft, loss, or destruction of the manuals must be reported to Anago immediately. If the manuals are lost or destroyed, the subfranchisor must purchase a replacement set from Anago for $500. All principals, employees, and agents of the subfranchisor with access to the Anago Manuals or other confidential information must sign a nondisclosure and noninterference agreement before initial subfranchisor training or upon employment.

Subfranchisors are prohibited from altering, editing, or changing the Anago Manuals. All improvements, developments, or modifications to any confidential information made by the subfranchisor, its employees, contractors, or unit franchisees are owned solely by Anago. Subfranchisors must ensure that their employees, contractors, and unit franchisees have written agreements assigning all rights to any innovations to the subfranchisor, who then assigns them to Anago. Subfranchisors must assist Anago in obtaining, perfecting, and enforcing ownership rights to these innovations, even after the agreement expires or terminates.

Subfranchisors acknowledge that all confidential information received before the agreement date was previously unknown to them and that Anago's marketing practices and operating procedures are unique. If a subfranchisor receives confidential information after the agreement date and does not object in writing within 30 days that any of the information should not be considered confidential, they waive their right to object. Any breach of this provision is considered a material breach of the agreement. Subfranchisors must take all necessary steps to protect the confidential information and not divulge it during or after the agreement without Anago's written consent. Upon termination of the agreement, the subfranchisor must discontinue all use of confidential information, including all manuals and client information.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.