Does the nondisclosure agreement for Apricot Lane's Trade Secrets extend beyond the termination of the Franchise Agreement?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
nual, which may be provided as one or more separate manuals, written instructional guides, CD Rom, or other communications from the Franchisor or its affiliates, which may be changed or supplemented from time to time.
- (e) "Franchise Agreement" shall mean the franchise agreement between Franchisor and
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- (g) "Term" shall have the meaning defined in the Franchise Agreement.
- (h) "Trade Secret(s)" shall mean information, including a customer lists, pattern, compilation, program, device, method, technique or process related to the Franchise Business that both derives independent 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 is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
- 2. Confidential Information and Trade Secrets. Associate and the Franchisor acknowledge that the Confidential Information and Trade Secrets that are developed and utilized in connection with the operation of the Franchise Business is unique and the exclusive property of the Franchisor or its affiliates. Associate acknowledges that any unauthorized disclosure or use of the Confidential Information and Trade Secrets would be wrongful and would cause irreparable injury and harm to the Franchisor or its affiliates. Associate further acknowledges that the Franchisor or its affiliates has expended a great amount of effort and money in obtaining and developing the Confidential Information and Trade Secrets, that the Franchisor or its affiliates has taken numerous precautions to guard the secrecy of the Confidential Information and Trade Secrets, and that it would be very costly for competitors to acquire or duplicate the Confidential Information and Trade Secrets.
- 3. Nondisclosure of Confidential Information. During the Term and any renewal Term of the Franchise Agreement and for all periods after the Term and any renewal Term of the Franchise Agreement, Associate shall not at any time, publish, disclose, divulge or in any manner communicate . to any person, firm, corporation, association, partnership or any other entity whatsoever or use, directly or indirectly, for its own benefit or for the benefit of any person, firm, corporation or other entity other than for the use of the Franchisor or the Franchise Business, any of the Confidential Information of the Franchisor or its affiliates.
- 4. Exceptions to Disclosing Confidential Information. Notwithstanding the foregoing, the restrictions on the disclosure and use of the Confidential Information will not apply to the following: (a) information that was in the public domain prior to being communicated to Associate through no fault of Associate; (b) information that entered the public domain after it was Communicated to Associate through no fault of Associate; (c) information that was in Associate's possession free of any obligation of confidence at the time it was communicated to Associate; or (d) the disclosure of the Confidential Information in judicial or administrative proceedings to the extent that Associate is legally compelled to disclose the information, if Associate has notified the Franchisor before disclosure and used Associate's best efforts, and afforded the
Franchisor the opportunity, to obtain an appropriate protective order or other assurance satisfactory to the Franchisor of confidential treatment for the information required to be so disclosed.
- **5.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, the nondisclosure agreement regarding trade secrets extends beyond the term of the Franchise Agreement. Specifically, during the term and any renewal term and "for as long as such information constitutes a Trade Secret", the Associate (which includes franchisees, employees, and other involved parties) is prohibited from disclosing or using Apricot Lane's trade secrets for any purpose other than benefiting the franchise. This obligation extends indefinitely as long as the information remains a trade secret.
This means that even after the franchise agreement ends, whether through termination or expiration, the franchisee and related parties are legally bound to protect the confidentiality of Apricot Lane's trade secrets. This includes not publishing, disclosing, or using the trade secrets for their own benefit or the benefit of others. The definition of "Trade Secret" includes information like customer lists, patterns, compilations, programs, devices, methods, techniques, or processes related to the Franchise Business that derive independent economic value from not being generally known and are subject to reasonable efforts to maintain secrecy.
This indefinite restriction is a significant consideration for potential Apricot Lane franchisees. It means that even after leaving the Apricot Lane system, they cannot use any knowledge or information gained during their time as a franchisee that is considered a trade secret. This could potentially limit their future business activities, especially if they choose to operate in a similar industry. Franchisees should carefully consider the scope of these trade secrets and how they might impact their future opportunities.
However, there are exceptions to this nondisclosure obligation. The restrictions do not apply to information that was already in the public domain, entered the public domain through no fault of the Associate, was already in the Associate's possession without any obligation of confidence, or is disclosed in legal proceedings where the Associate is legally compelled to disclose the information, provided the Franchisor is notified and given the opportunity to obtain a protective order. These exceptions provide some level of protection for the franchisee against inadvertently violating the nondisclosure agreement.