Is a Beauty Bungalows franchisee obligated to adhere to security procedures for maintaining Confidential Information?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
7. MANUAL AND CONFIDENTIAL INFORMATION
7.01 Confidential Information. The System, the Manual, and other Confidential Information are proprietary, involve Trade Secrets of Franchisor, and are disclosed to Franchisee solely on the express condition that Franchisee agrees, and Franchisee does hereby agree to: fully and strictly adhere to all security procedures prescribed in writing by Franchisor, in its sole discretion, for maintaining the Confidential Information as confidential, including without limitation, the obligation to;
- (a) disclose such information to its employees only to the extent necessary to market and for the operation of the Business in accordance with this Agreement;
- (b) not use any such information in any other business or in any manner not specifically authorized or approved in writing by Franchisor; and
- (c) exercise the highest degree of diligence and make every effort to maintain the absolute confidentiality of all such information during and after the term of this Agreement, and follow Franchisor's security procedures, which include the execution of approved nondisclosure agreements, and intranet, extranet and Internet usage agreements when developed by Franchisor, by Franchisee and any employee or agent who is allowed access.
7.02 Standards and Authorized Use.
Franchisee must maintain strict compliance with the Manual as presently set forth and as subsequently amended and revised.
- 7.03 Unauthorized Use.
Franchisee must not copy or otherwise reproduce any Confidential Information and must establish procedures to prevent unauthorized use by any other person.
Unauthorized use of the Manual or the System will constitute a breach of this Agreement and an infringement of our proprietary rights, including trade secrets and copyrights.
Franchisee must promptly report any unauthorized use of the Manual or other Confidential Information.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, franchisees must adhere to security procedures for maintaining Confidential Information. The FDD defines Confidential Information as all methods for establishing, operating, and promoting the Business pursuant to the Franchisor's distinctive business format, plans, methods, data, processes, supply systems, marketing systems, formulas, techniques, designs, layouts, operating procedures, Marks and information and know-how of the Franchisor and such other information as may be further developed periodically by the Franchisor. This also includes lists of, and information regarding, actual and prospective customers of any Beauty Bungalows Studio.
The Beauty Bungalows franchisee agrees to fully and strictly adhere to all security procedures prescribed in writing by the Franchisor for maintaining the confidentiality of the Confidential Information. This includes disclosing such information to employees only to the extent necessary for the operation of the business, not using the information in any other business, and exercising the highest degree of diligence to maintain the absolute confidentiality of all such information during and after the term of the Franchise Agreement.
Furthermore, Beauty Bungalows franchisees must follow the Franchisor's security procedures, which include the execution of approved nondisclosure agreements, and intranet, extranet and Internet usage agreements when developed by Franchisor, by Franchisee and any employee or agent who is allowed access. Franchisees must also maintain strict compliance with the Manual as presently set forth and as subsequently amended and revised. Franchisees must not copy or otherwise reproduce any Confidential Information and must establish procedures to prevent unauthorized use by any other person. Unauthorized use of the Manual or the System will constitute a breach of this Agreement and an infringement of our proprietary rights, including trade secrets and copyrights. Franchisees must promptly report any unauthorized use of the Manual or other Confidential Information.