What happens if a Belocal franchisee discloses confidential information in violation of the agreement?

According to Belocal's 2025 Franchise Disclosure Document, unauthorized disclosure of confidential information can lead to serious consequences, including immediate termination of the franchise agreement. Belocal defines "Confidential Information" broadly, encompassing any oral, visual, or written information related to the franchisor, its affiliates, the franchised business, and any publication furnished by Belocal. This includes trademarks, trade names, trade secrets, research, plans, products, services, customer lists, supplier information, advertisers, business plans, marketing data, software, financial information, manuals, and data stored within Belocal's IT systems.

The franchise agreement specifies that any attempt by a franchisee to upload, download, or copy confidential information not directly related to the franchised business, such as client and advertiser information, constitutes grounds for immediate termination. This provision underscores the importance Belocal places on protecting its proprietary information and maintaining a competitive advantage.

Furthermore, franchisees and their principals must ensure that anyone they grant access to confidential information, such as counsel and accountants, also comply with the confidentiality provisions of the agreement. The franchisee and each principal are held jointly and severally responsible for any breaches of the agreement by those they grant access to confidential information. This highlights the need for franchisees to exercise caution and diligence in managing access to sensitive business data.

In the event a franchisee or principal is legally compelled to disclose confidential information, they must provide Belocal with prompt written notice so Belocal can seek a protective order or other remedy. If a protective order is not obtained, the franchisee and principals must only disclose the portion of information legally required and make efforts to ensure confidential treatment of the disclosed information. This clause aims to balance legal obligations with the need to protect Belocal's confidential information to the greatest extent possible.