What is the condition for a Belocal franchisee to upload Confidential Information to a publicly available AI system?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor and Principals acknowledge and agree that no Confidential Information may be uploaded to, processed by, or disclosed to any publicly available AI system model, or dataset without the prior written consent of Franchisor. In consideration of the opportunity to obtain access to the Confidential Information, Franchisee and each Principal agree and covenant that, during the Term of this Agreement and following the expiration or termination of this Agreement, regardless of the cause thereof, Franchisee and each Principal shall:
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee is prohibited from uploading, processing, or disclosing any Confidential Information to any publicly available AI system model or dataset without obtaining prior written consent from Belocal. This restriction applies to both the franchisee and their principals.
This condition is significant because it protects Belocal's proprietary information in an era of rapidly advancing AI technology. Confidential Information includes, but is not limited to, trademarks, trade names, service marks, trade secrets, research, plans, products, services, customer lists, supplier information, advertisers, business plans, marketing data and materials, software, electronic code, forms, processes, methods of operation, strategic information, financial information, and manuals.
The implications of this restriction are that a Belocal franchisee must be extremely cautious about using AI tools that involve uploading or processing data related to their franchise operations. Any use of AI platforms that could potentially expose Belocal's Confidential Information requires explicit approval from the franchisor. Failure to comply with this provision could result in a breach of the franchise agreement and potential legal consequences.
This type of clause is becoming increasingly common in franchise agreements as franchisors seek to protect their intellectual property and maintain a competitive advantage in the marketplace. Prospective Belocal franchisees should carefully consider this restriction and ensure they have a clear understanding of what constitutes Confidential Information and the process for obtaining written consent before using AI systems that could access such information.