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What are the specific requirements for Anago franchisees to protect the confidentiality of the franchisor's trade secrets and proprietary information (Item 13)?

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.

What This Means (2025 FDD)

According to Anago's 2025 Franchise Disclosure Document, franchisees receive training and confidential information, including the Anago Manuals, which are considered trade secrets. Franchisees must treat this information as confidential and use their best efforts to maintain its secrecy. The Anago Manuals must be kept in a secure area at the franchisee's office, and any theft, loss, or destruction of the manuals must be reported to Anago immediately. A replacement set of manuals costs $500. Access to the manuals should be strictly limited to employees who have a 'need to know' to perform their jobs.

An Anago franchisee cannot copy, record, or reproduce any part of the Anago Manuals without written consent from Anago, nor can they make the manuals available to any unauthorized person, except as required by law. All principals, employees, and agents involved with the Anago franchise and having access to the manuals or confidential information must sign a nondisclosure and noninterference agreement before training or upon employment.

Franchisees must maintain the absolute secrecy and confidentiality of the confidential information both during and after the term of the agreement. They are prohibited from using the confidential information in any other business or capacity, including any competitive business. Franchisees must also implement procedures required by Anago to prevent unauthorized use, disclosure, or access to the confidential information and must require anyone with access to sign Anago's confidentiality agreement.

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.