According to the Aplus franchise agreement, what constitutes a 'Trade Secret'?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
For the purposes of this Agreement, a "Trade Secret" is information in any form (including, but not limited to, materials and techniques, technical or non-technical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans, passwords, lists of actual or potential customers or suppliers) related to or used in the Franchised Business that is not commonly known by or available to the public and that information: (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a 'Trade Secret' is defined as information in any form related to or used in the Franchised Business that is not commonly known or available to the public. This information must derive economic value from not being generally known and must be subject to reasonable efforts to maintain its secrecy.
Specifically, the definition includes materials and techniques, technical or non-technical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans, passwords, and lists of actual or potential customers or suppliers. The agreement emphasizes that the trade secrets are important to Aplus's business.
This definition means that Aplus franchisees are obligated to protect a wide array of information related to the operation of their franchise. This obligation extends not only to tangible items like manuals and software but also to less concrete aspects like customer lists and financial strategies. Franchisees must take reasonable steps to ensure this information remains confidential, as its disclosure could harm Aplus's competitive advantage.
The franchise agreement also clarifies that the franchisee's access to trade secrets creates a relationship of confidence and trust. This underscores the importance Aplus places on maintaining the confidentiality of its proprietary information and the legal responsibility of the franchisee to uphold this confidentiality.