What is a Body20 franchisee's liability for unauthorized use of Proprietary Information by an employee?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
You will be liable to us for any unauthorized use or disclosure of Proprietary Information by any employee or other person to whom you disclose Proprietary Information.
You will take reasonable precautions to protect the Proprietary Information from unauthorized use or disclosure and will implement any systems, procedures, or training programs that we require.
At our request, you will require anyone who may have access to the Proprietary Information to execute non-disclosure agreements in a form satisfactory to us that identifies us as a third-party beneficiary of such covenants with the independent right to enforce the agreement.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, franchisees are liable for any unauthorized use or disclosure of Proprietary Information by their employees or any other person to whom they disclose such information. This means a Body20 franchisee is responsible if an employee misuses or reveals confidential details about the Body20 system. Proprietary Information includes trade secrets, know-how, and confidential details related to the System, business practices, vendor relationships, training sessions, or the operation and promotion of the studio.
To mitigate this risk, Body20 requires franchisees to take reasonable precautions to protect Proprietary Information. This includes implementing required systems, procedures, and training programs. Additionally, Body20 franchisees must ensure that anyone with access to Proprietary Information, such as employees, signs non-disclosure agreements that are satisfactory to Body20. These agreements should identify Body20 as a third-party beneficiary, granting them the right to enforce the agreement directly.
This liability extends to any unauthorized use or disclosure, regardless of whether the franchisee directly authorized it. Therefore, it is crucial for Body20 franchisees to diligently protect Proprietary Information and ensure that all employees and relevant parties understand their obligations regarding confidentiality. Failure to do so could result in financial or legal repercussions for the franchisee.