During the term of the Apricot Lane Franchise Agreement, can an Associate disclose Trade Secrets?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
- **5.
Nondisclosure of Trade Secrets.** During the Term and any renewal Term of the Franchise Agreement and for as long as such information constitutes a Trade Secret, 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 Trade Secrets of the Franchisor or its affiliates.
- **6.
Noncompetition Covenant.** Associate acknowledges that, in addition to the license of the Marks hereunder, the Franchisor has also licensed commercially valuable information that comprises and is a part of the Franchise Business, including without limitation, the Confidential Information and Trade Secrets and that the value of this information derives not only from the time, effort and money that went into its compilation, but from the usage of the same by all franchisees of the Franchisor using the Marks and System.
Associate therefore agrees that other than the Franchise Business licensed under a Franchise Agreement, the Associate, will not during the Term and renewal Term of the Franchise Agreement:
- (a) Have any direct or indirect controlling interest as a disclosed or beneficial owner in a Competitive Business; or
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, an Associate is prohibited from disclosing trade secrets during the term and any renewal term of the Franchise Agreement. Specifically, Item 23 outlines that an Associate cannot publish, disclose, divulge, or communicate in any manner the Trade Secrets of Apricot Lane or its affiliates to any entity. Furthermore, they cannot use these trade secrets directly or indirectly for their own benefit or for the benefit of anyone other than Apricot Lane or the Franchise Business.
This restriction is significant for potential Apricot Lane franchisees because it extends to anyone associated with the franchise, not just the franchisee themselves. This includes officers, partners, directors, agents, managers, employees, or beneficial owners, as well as immediate family members or domestic partners of a principal owning a Franchise Business. All these individuals are bound by the nondisclosure agreement, highlighting the importance Apricot Lane places on protecting its confidential information.
The FDD also defines "Trade Secret(s)" as information related to the Franchise Business that has independent economic value from not being generally known and is subject to reasonable efforts to maintain its secrecy. This definition includes customer lists, patterns, compilations, programs, devices, methods, techniques, or processes. The agreement acknowledges that unauthorized disclosure would cause irreparable harm to Apricot Lane, as they have invested significant effort and money in developing these trade secrets and taken precautions to guard their secrecy.
There are limited exceptions to this strict nondisclosure policy. An Associate is permitted to disclose information if it was already in the public domain, became public through no fault of their own, or was already in their possession without any obligation of confidence. Additionally, disclosure is allowed if legally compelled in judicial or administrative proceedings, provided that Apricot Lane is notified beforehand and given the opportunity to obtain a protective order. These exceptions provide some flexibility while still ensuring the robust protection of Apricot Lane's trade secrets.