Can Belocal franchisees use the Confidential Information for purposes other than operating the Franchised Business?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) Use the Confidential Information exclusively in conjunction with the operation of the Franchised Business and to carry out the obligations of Franchisee pursuant to the terms of this Agreement and not for any other purpose, and shall refrain from disclosing the Confidential Information to any third person or entity not directly associated with Franchisee, except as may be required by law. In the event Franchisee, any Principal, or any persons to whom any Confidential Information was lawfully disclosed become legally compelled (by deposition, interrogatory, request for documents, subpoena, civil investigative demand, or similar process) to disclose any of the Confidential Information, Franchisee and Principals shall provide Franchisor with prompt prior written notice of such requirement so that Franchisor may seek a protective order or other appropriate remedy and/or waive compliance with the terms hereof. In the event that such protective order or other remedy is not obtained, or that Franchisor waives compliance with the provisions hereof, Franchisee and Principals agree to furnish only that portion of the Confidential Information which Franchisee and/or Principals are advised by written opinion of counsel is legally required and to exercise best efforts to obtain assurance that confidential treatment will be accorded such disclosed Confidential Information;
- (2) Ensure that all counsel, accountants, and other representatives of Franchisee and/or Principals who are given access any Confidential Information on behalf of Franchisee or any Principal comply with the confidentiality provisions of this Agreement. Franchisee and each Principal are, jointly and severally, fully responsible for any breach of this Agreement by any person to whom access to the Confidential Information is given by Franchisee, any Principals, or any of their representatives;
- (3) Not make any copies of the Confidential Information for any purpose that is not directly related to the Franchised Business;
- (4) Not upload or download, or attempt to upload or download, any Confidential Information that is not directly related to the Franchised Business; and
- (5) Upon termination, expiration, or transfer of this Agreement, promptly return to Franchisor all Confidential Information and all copies thereof.
For clarity, any attempt by Franchisee (using any method) to upload, download, or copy into any format any Confidential Information that is not directly related to the Franchised Business, including without limitation, client and advertiser information, shall constitute grounds for immediate termination of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, franchisees are explicitly restricted from using Confidential Information for any purpose other than operating their franchised business. The agreement states that franchisees must use the Confidential Information exclusively to fulfill their obligations under the franchise agreement.
Belocal emphasizes the importance of protecting its Confidential Information, defining it broadly to include trademarks, trade names, trade secrets, research, plans, customer lists, supplier information, business plans, marketing data, software, and financial information. Franchisees are prohibited from disclosing this information to third parties, making copies for unrelated purposes, or uploading/downloading Confidential Information not directly related to the business. Any unauthorized attempt to handle Confidential Information, such as client and advertiser details, can lead to immediate termination of the franchise agreement.
The franchise agreement requires franchisees to ensure that anyone they grant access to Confidential Information, such as counsel or accountants, also complies with these confidentiality provisions. The franchisee is fully responsible for any breaches caused by those they allow access to the information. Upon termination or transfer of the agreement, all Confidential Information must be promptly returned to Belocal. These measures are in place to protect Belocal's competitive advantage and maintain the integrity of its business operations.