What are the consequences if a Bft franchisee's manager or employee violates the confidentiality provisions?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee under this Section.
12. CONFIDENTIAL INFORMATION
12.1 Franchisor's Confidential Information.
A. Franchisee acknowledges and agrees that all information relating to the System and to the development and operation of the Studio, including, without limitation, the Learning Management System, Franchisor's training programs, members and supplier lists, customer data, or other information or knowhow distinctive to the development or operation of a BFT Studio (all of the preceding information is referred to herein as the "Confidential Information") is considered to be proprietary and trade secrets of Franchisor. Confidential Information does not include information, knowledge, or know-how, which is lawfully known to the public without violation of applicable law or an obligation to Franchisor or its affiliates, or any Restricted Data. Franchisee (and its Owners, if Franchisee is a legal entity) agrees that, during and after the Term, Franchisee will, and cause its spouses, immediate family members, affiliates, and assigns to: (i) process, retain, use, collect, and disclose Confidential Information strictly to the limited extent, and in such a manner, as necessary for the development and operation of the Studio in accordance with this Agreement, and not for any other purposes of any kind; (ii) process, retain, use, collect, and disclose Confidential Information strictly in accordance with the privacy policies and System Standards and Franchisee's and its representative's instructions; (iii) keep confidential and not disclose, sell, distribute, or trade Confidential Information to any person other than those of Franchisee's employees, independent contractors, and representatives who need to know such Confidential Information for the purpose of assisting Franchisee it is operation of the Studio in accordance with this Agreement; (iv) not make unauthorized copies of any portion of Confidential Information; (v) adopt and maintain administrative, physical, and technical safeguards to prevent unauthorized use or disclosure of any portion of Confidential Information, including by establishing reasonable security and access measures, restricting its disclosure to key personnel, and/or by requiring persons who have access to such Confidential Information to be bound by contractual obligations to protect such Confidential Information and preserve Franchisor's rights and controls in such Confidential Information, in each case that are no less protective or beneficial to Franchisor than the terms of this Agreement; and (vi) at Franchisor's request, destroy or return any portion of the Confidential Information. Upon Franchisor's request, Franchisee shall require the Studio's employees and any independent contractors to execute a nondisclosure and non-competition agreement in a form satisfactory to Franchisor. Franchisee shall not acquire any interest in the Confidential Information other than the right
to utilize it in the development and operation of its Studio in accordance with this Agreement. If Franchisee or Franchisee's employees or any independent contractors learn about an unauthorized use of any Confidential Information, Franchisee must promptly notify Franchisor. Franchisor is not obligated to take any action but will respond to the information as it deems appropriate. If Franchisee at any time conducts, owns, consults with, is employed by or otherwise assists a similar or competitive business to that franchised hereunder, the doctrine of "inevitable disclosure" will apply, and it will be presumed that Franchisee is in violation of this covenant; and in such case, it shall be Franchisee's burden to prove that Franchisee is not in violation of this covenant.
- B. Franchisee acknowledges that Franchisor is not making any representations or warranties, express or implied, with respect to the Confidential Information. Franchisor and its affiliates have no liability to Franchisee and its affiliates for any errors or omissions from the Confidential Information.
- C. Franchisee agrees that any new concept, process or improvement in the operation or promotion of the Studio developed by or on behalf of Franchisee that relates to or enhances BFT Studios or the System, or any aspect of Franchisor's business, shall be the sole property of Franchisor, and Franchisee shall promptly notify Franchisor and shall provide Franchisor with all necessary information and execute all necessary documents to memorialize said ownership, or, if necessary, Franchisee's assignment of such ownership to Franchisor, without compensation. Franchisee acknowledges that Franchisor may utilize or disclose such information to other Franchisees.
- D.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 56–57)
What This Means (2025 FDD)
According to the 2025 Bft Franchise Disclosure Document, franchisees must ensure their employees and independent contractors sign a non-disclosure and non-competition agreement that Bft finds satisfactory. The franchisee is responsible for protecting Bft's confidential information, which includes the Learning Management System, training programs, member and supplier lists, and customer data. This information is considered proprietary and trade secrets of Bft. The franchisee must limit the use, collection, and disclosure of confidential information strictly to what is necessary for operating the Bft studio according to the franchise agreement. They must also maintain safeguards to prevent unauthorized use or disclosure.
If a Bft franchisee or their owners, through gross negligence or intentional actions, compromise the secure access to the Learning Management System or post confidential information online, they will be required to compensate Bft for the breach and any related damage to the brand and system. The FDD specifies that limitations of remedies in other sections do not restrict Bft's ability to seek compensation in such cases.
Furthermore, Bft franchisees agree to indemnify and defend Bft from any losses, damages, claims, or liabilities arising from a breach or attempted breach of the franchise agreement, including those related to the misuse of confidential information. This indemnification covers legal costs and expenses incurred by Bft. Bft can also seek injunctive relief to enforce the confidentiality provisions, meaning a court order could compel the franchisee to stop the unauthorized use or disclosure of confidential information. The franchisee is responsible for covering all associated costs and legal fees Bft incurs in enforcing these provisions.
Finally, the FDD states that a franchisee's unauthorized disclosure, utilization, or duplication of any part of the Bft system, the Learning Management System, or other confidential information, if done contrary to the franchise agreement, can be grounds for termination of the franchise agreement. This highlights the critical importance Bft places on maintaining the confidentiality of its proprietary information and the serious repercussions for franchisees who fail to protect it.