What happens to the confidentiality obligations of a Better Blend franchisee upon termination of the franchise agreement?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
13.1 Confidential Information. With respect to all Confidential Information, Franchisee shall (a) adhere to all 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 in
writing by BBF, (d) exercise the highest degree of diligence and effort to maintain the confidentiality of all such information during and after the term of this Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized disclosure or use of Confidential Information. Franchisee acknowledges that all Confidential Information is owned by BBF (except for Confidential Information which BBF licenses from another person or entity). This Section will survive the termination or expiration of this Agreement indefinitely.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the confidentiality obligations of a franchisee extend indefinitely beyond the termination or expiration of the franchise agreement. Specifically, the franchisee must continue to maintain the confidentiality of all confidential information, exercising the highest degree of diligence and effort to protect it. This includes adhering to Better Blend's procedures for maintaining confidentiality, disclosing information to employees only when necessary for business operation, and refraining from using the information in any other business or manner not authorized by Better Blend.
This indefinite obligation means that even after a franchisee leaves the Better Blend system, they are legally bound to protect the brand's proprietary information. This includes trade secrets, operational methods, marketing strategies, and customer data. The franchisee cannot use this information to start a competing business or share it with others.
Better Blend retains ownership of all confidential information, except for information it licenses from another entity. This ownership reinforces the franchisee's responsibility to protect the information and prevents them from claiming any rights to it after the franchise agreement ends. The FDD specifies that all customer data collected by the business and data from the point-of-sale system (excluding employee data) is considered confidential information belonging to Better Blend.
For a prospective franchisee, this indefinite confidentiality obligation is a significant consideration. It means that their knowledge of Better Blend's business practices cannot be used for personal gain after leaving the system. Failure to uphold these confidentiality obligations could result in legal action from Better Blend.