What is the Aplus franchisee required to do to prevent unauthorized use or disclosure of trade secrets and confidential information, as prescribed by the Franchisor?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee acknowledges that Franchisor will disclose Trade Secrets and other Confidential Information to Franchisee during the training program, through the Manual, and as a result of guidance furnished to Franchisee during the term of this Agreement. Franchisee shall not acquire any interest in the Trade Secrets or other Confidential Information or Franchisor's goodwill, other than the right to use it in the development and operation of the Franchised Business and in performing its duties during the term of this Agreement. Franchisee acknowledges that the use or duplication of the Trade Secrets or other Confidential Information in any other business venture would constitute an unfair method of competition. Franchisee and each Owner (if applicable) acknowledges that the Trade Secrets and other Confidential Information are proprietary and are disclosed to Franchisee solely on the condition that Franchisee (and all holders of a legal or beneficial interest in Franchisee, each Owner, and all officers, directors, executives, managers and members of the professional staff of Franchisee): (a) shall not, directly or indirectly, use the Trade Secrets or other Confidential Information in any other business or capacity or for the benefit of any other party; (b) shall maintain the absolute confidentiality of the Trade Secrets and other Confidential Information during and after the term of this Agreement; (c) shall not disclose Trade Secrets or other Confidential Information to any third party or any individual associated with Franchisee who has not executed a form the same as or similar to the Nondisclosure Agreement attached hereto as Attachment 2; (d) shall not make any unauthorized copies of any portion of the Trade Secrets or other Confidential Information disclosed in written or other tangible form; and (e) shall adopt and implement all reasonable procedures prescribed from time to time by Franchisor to prevent unauthorized use or disclosure of the Trade Secrets and other Confidential Information. Franchisee shall enforce this Section 7.1 as to its employees, agents and representatives and shall be liable to Franchisor for any unauthorized disclosure or use of Trade Secrets or other Confidential Information by any of them.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, as a franchisee, you acknowledge that Aplus will disclose trade secrets and other confidential information during the training program, through the manual, and as a result of guidance furnished during the term of the agreement. The franchisee cannot acquire any interest in the trade secrets, confidential information, or Aplus's goodwill, other than the right to use it in the development and operation of the franchised business and in performing its duties during the term of this Agreement. The franchisee acknowledges that the use or duplication of the trade secrets or other confidential information in any other business venture would constitute an unfair method of competition.
The franchisee, all holders of a legal or beneficial interest in the franchisee, each owner, and all officers, directors, executives, managers, and members of the professional staff of the franchisee must adhere to several conditions. They must not directly or indirectly use the trade secrets or other confidential information in any other business or capacity or for the benefit of any other party. They must maintain the absolute confidentiality of the trade secrets and other confidential information during and after the term of this Agreement. They cannot disclose trade secrets or other confidential information to any third party or any individual associated with the franchisee who has not executed a Nondisclosure Agreement.
Additionally, the franchisee must not make any unauthorized copies of any portion of the trade secrets or other confidential information disclosed in written or other tangible form. The franchisee must adopt and implement all reasonable procedures prescribed from time to time by Aplus to prevent unauthorized use or disclosure of the trade secrets and other confidential information. The franchisee is responsible for enforcing these confidentiality obligations with its employees, agents, and representatives and will be liable to Aplus for any unauthorized disclosure or use of trade secrets or confidential information by any of them.
These measures are typical in franchising to protect the franchisor's proprietary information and maintain a competitive advantage. Franchisees should carefully review the Nondisclosure Agreement and ensure all relevant parties understand their obligations to protect Aplus's confidential information.