What is the Beauty Bungalows franchisee's responsibility regarding the confidentiality of trade secrets after the franchise term?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
orefront sign at Franchisor's request within five (5) years immediately preceding the expiration of initial term of this Agreement.
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.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, franchisees must maintain the absolute confidentiality of the System, the Manual, and other confidential information, which are considered trade secrets, both during and after the franchise term. This obligation includes adhering to security procedures prescribed by Beauty Bungalows for maintaining confidentiality. Franchisees must disclose confidential information to their employees only to the extent necessary for operating the business, and they cannot use such information in any other business or manner not explicitly authorized by Beauty Bungalows.
To ensure confidentiality, franchisees must exercise a high degree of diligence and make every effort to protect all confidential information. This includes following Beauty Bungalows' security procedures, such as executing approved nondisclosure agreements and intranet, extranet, and Internet usage agreements with employees or agents who have access to the information. Franchisees are also prohibited from copying or reproducing any confidential information and must establish procedures to prevent unauthorized use by any person.
Unauthorized use of the Manual or the System constitutes a breach of the Franchise Agreement and an infringement of Beauty Bungalows' proprietary rights, including trade secrets and copyrights. Franchisees are required to promptly report any unauthorized use of the Manual or other confidential information. This ongoing responsibility to protect Beauty Bungalows' trade secrets is a critical aspect of the franchise agreement, extending beyond the active term of the franchise.