For Anago, is the Subfranchisor prohibited from divulging Confidential Information after the expiration or termination of the Agreement?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Subfranchisor will take all other steps necessary, at his or her own expense, to protect the Confidential Information and will not divulge Confidential Information either during, or upon the expiration or termination of, this Agreement without the written consent of Franchisor.
Section 9.2 - Discontinue Use of Proprietary Marks and Confidential Information
- (c) Subfranchisor shall immediately discontinue all use of all Confidential Information, including all Manuals and Client Information.
Subfranchisor's obligation to assist Franchisor with respect to such ownership rights shall continue beyond the 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.
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.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the subfranchisor is indeed prohibited from divulging confidential information even after the expiration or termination of the agreement. Specifically, the subfranchisor agrees not to divulge Confidential Information either during, or upon the expiration or termination of, the Agreement without Anago's written consent. This obligation is reinforced by the requirement to immediately discontinue all use of Confidential Information, including all Manuals and Client Information, promptly after the expiration or termination of the agreement.
This perpetual restriction on the use of confidential information is a standard practice in franchising to protect the franchisor's proprietary business methods, trade secrets, and customer data. For a prospective Anago subfranchisee, this means that even after leaving the Anago system, they cannot use or share any of the knowledge, manuals, or client information they gained during their time as a subfranchisee. This includes the Anago Manuals, which contain valuable training and operational information, and are considered trade secrets by Anago. The subfranchisee must also ensure that their employees and contractors are bound by similar confidentiality obligations.
Furthermore, the subfranchisor's obligation to assist Anago with ownership rights related to any innovations continues beyond the termination of the agreement. This includes executing documents and providing assistance to protect Anago's intellectual property. The subfranchisee also agrees not to contest Anago's ownership of the Confidential Information or any other intellectual property rights. These clauses are designed to protect Anago's competitive advantage and prevent former subfranchisees from using confidential information to compete against the franchise system.
In practical terms, a subfranchisee should be meticulous in protecting Anago's confidential information during the term of the agreement and understand that these obligations extend indefinitely beyond the agreement's termination. This includes maintaining secure storage for the Anago Manuals, limiting access to employees with a need to know, and ensuring all employees sign non-disclosure agreements. The FDD also specifies that upon theft, loss, or destruction of the Anago Manuals, a replacement set must be purchased by the Subfranchisor from Franchisor at a cost of $500.