During the term of the Belocal agreement, what is the permitted use of the Confidential Information by the franchisee and principals?
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 and their principals are permitted to use the Confidential Information exclusively to operate the Franchised Business and fulfill their obligations under the Franchise Agreement. This means the franchisee can utilize Belocal's proprietary knowledge, systems, and materials specifically to run their Belocal franchise. Any other use is strictly prohibited.
The agreement explicitly states that franchisees and principals must not disclose the Confidential Information to any third party not directly associated with the franchise, unless legally required. If a legal demand for disclosure arises, the franchisee must promptly notify Belocal to allow them to seek a protective order or waive compliance. If a protective order isn't obtained, the franchisee must only disclose the legally required portion of the Confidential Information, and they must try to ensure it receives confidential treatment.
Furthermore, franchisees and principals must ensure that any representatives who access the Confidential Information comply with the confidentiality provisions. They are jointly and severally responsible for any breaches caused by those with whom they share the information. Copying the Confidential Information is prohibited unless directly related to the Franchised Business, and any unauthorized attempts to upload, download, or copy such information, especially client and advertiser data, can lead to immediate termination of the Franchise Agreement. Upon termination or expiration of the agreement, all Confidential Information must be promptly returned to Belocal.