What is Belocal required to do if a franchisee is legally compelled to disclose confidential information?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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;
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, if a franchisee or their principals are legally required to disclose confidential information, they must promptly notify Belocal in writing. This allows Belocal to seek a protective order or another suitable solution, or to waive the franchisee's compliance with the confidentiality terms.
If a protective order or another remedy cannot be obtained, or if Belocal waives compliance, the franchisee and their principals must only disclose the portion of confidential information that legal counsel has advised them is legally required. They must also make their best effort to ensure that the disclosed confidential information is treated confidentially.
This provision protects Belocal's confidential information while also ensuring the franchisee complies with legal obligations. It is a fairly standard clause in franchise agreements, as franchisors need to protect their trade secrets and proprietary information, but franchisees must also adhere to legal requirements.