Is the Master Franchisee required to keep the Proprietary Information of Bhc confidential after the termination of the Master Franchise Agreement?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
If Master Franchisee is an entity, it cannot use the Marks "BHC" in its legal name.
9.3 Trade Secrets and Proprietary Information.
- (a) Under this Agreement, Franchisor is granting Master Franchisee access to the Proprietary Information, and Franchisor's other confidential data and information. Master Franchisee acknowledges that the material and information now and hereafter provided or revealed to Master Franchisee pursuant to this Agreement (including in particular, but without limitation, the contents of the Operations Manual) are Franchisor's Trade Secrets and are revealed in confidence, and Master Franchisee expressly agrees to keep and respect the confidences so reposed, both during the term of this Agreement and thereafter. Franchisor expressly reserves all rights with respect to the Marks, Proprietary Information, methods of operation and other proprietary information, except as may be expressly granted to Master Franchisee hereby or in the Operations Manual.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the Master Franchisee is required to maintain the confidentiality of Bhc's proprietary information even after the termination of the Master Franchise Agreement. Specifically, the Master Franchisee acknowledges that the information provided, including the contents of the Operations Manual, constitutes Bhc's trade secrets and is revealed in confidence. The Master Franchisee expressly agrees to respect these confidences both during the term of the agreement and thereafter. This obligation extends to refraining from any use, direct or indirect, of any Proprietary Information or Trade Secrets following termination or expiration of the Agreement.
This requirement is typical in franchising, as franchisors need to protect their competitive advantage. The Master Franchisee's agreement to maintain confidentiality indefinitely protects Bhc's business methods, operational techniques, and other proprietary information. This prevents former Master Franchisees from using Bhc's confidential information to operate a competing business or to otherwise gain an unfair advantage.
The FDD also states that upon expiration or termination of the agreement, the Master Franchisee has no claim against Bhc for compensation for any goodwill associated with the Marks. This reinforces Bhc's ownership and control over its proprietary information and brand identity, even after the Master Franchise Agreement ends. The terms of Article 14, which likely contains these confidentiality clauses, survive termination, expiration, or cancellation of the agreement, further emphasizing the enduring nature of these obligations.