Does the Better Blend Guaranty specify any geographic limitations on the Guarantor's obligation to maintain confidentiality?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
With respect to all Confidential Information, Guarantor shall (a) adhere to all security procedures prescribed by BBF for maintaining confidentiality, (b) disclose such information to its employees only to the extent necessary for the operation of the Business, (c) not use any such information in any other business or in any manner not specifically authorized or approved in writing by BBF, (d) exercise the highest degree of diligence and make every effort to maintain the confidentiality of all such information during and after the term of the Franchise Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized disclosure or use of Confidential Information.
Guarantor acknowledges that all Confidential Information is owned by BBF or its affiliates (except for Confidential Information which BBF licenses from another person or entity).
Guarantor
acknowledges that all customer data collected or generated by the Business and all data collected or generated by the point-of-sale system (other than data regarding employees) is Confidential Information belonging to BBF. This Section will survive the termination or expiration of the Franchise Agreement indefinitely.
3. Covenants Not to Compete.
- (a) Restriction In Term.
During the term of the Franchise Agreement, Guarantor shall not directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor.
- (b) Restriction Post Term.
For two years after the Franchise Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer by Guarantor), Guarantor shall not directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor located within five miles of Franchisee's Territory or within five miles of the territory of any other Better Blend business operating on the date of expiration, termination, or transfer, as applicable.
If the Franchise Agreement is terminated before the Territory is determined, then the area of non-competition will be the Site Selection Area and within five miles the territory of any other Better Blend business operating on the date of termination.
If a given Better Blend business does not have a defined territory, then for purposes of this Section its territory will be deemed to be a 3-mile radius.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the Guaranty agreement does not specify any geographic limitations regarding the obligation to maintain confidentiality. The Guarantor is obligated to maintain the confidentiality of Better Blend's confidential information both during and after the term of the Franchise Agreement. This obligation extends to adhering to security procedures, limiting disclosure to employees, and preventing unauthorized use or reproduction of confidential information. The confidentiality requirements survive the termination or expiration of the Franchise Agreement indefinitely, meaning there is no geographic limit to this obligation.
However, the Guaranty does include geographic limitations regarding covenants not to compete. For two years after the Franchise Agreement expires or is terminated, the Guarantor cannot be involved with a competitor within five miles of the franchisee's territory or any other Better Blend business. If the territory isn't determined before termination, the non-compete area is the Site Selection Area and within five miles of any other Better Blend business. If a Better Blend business lacks a defined territory, its territory is considered a 3-mile radius for non-compete purposes.
Therefore, while the obligation to protect confidential information applies without geographic boundaries, the non-compete obligations have specific geographic restrictions. A prospective franchisee should understand the difference between these two obligations under the Guaranty, as one has no geographic limit while the other does.