Can Body20 require franchisees to obtain non-disclosure and non-compete agreements from officers, directors, and other individuals?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
We are a franchisee of BODY20 Franchisor LLC ("Franchisor") under a Franchise Agreement dated [DATE] (the "Franchise Agreement"), pursuant to which Franchisor granted us the right to operate a franchised business (the "Studio") under the "BODY20® " name (the "Brand"). We have a license to use the Brand and certain other trademarks designated by Franchisor (collectively, the "Marks"), certain policies and procedures used in the operation of Studios (the "System"), and the confidential information developed and owned by Franchisor and its affiliates in our Studio. Franchisor recognizes that, in order for us to effectively operate our business, our employees and independent contractors whom we retain must have access to certain confidential information and trade secrets owned by Franchisor. Disclosure of this confidential information and trade secrets to unauthorized persons, or its use for any purpose other than the operation of our Studio, would harm Franchisor, other franchise owners, and us. Accordingly, Franchisor requires us to have you sign this Agreement.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, Body20 recognizes that for a franchisee to effectively operate their business, their employees and independent contractors must have access to confidential information and trade secrets. To protect this information, Body20 requires franchisees to have these individuals sign an agreement.
Specifically, Body20 acknowledges that franchisees will need to share confidential information with their employees and independent contractors to run the Studio effectively. Because the disclosure of this information to unauthorized parties or its misuse could harm Body20, its other franchisees, and the franchisee themselves, Body20 mandates that these individuals sign an agreement.
This requirement ensures that all individuals with access to Body20's confidential information are bound by confidentiality and non-compete obligations, safeguarding the brand's trade secrets and competitive advantage. Prospective franchisees should carefully review the terms of this agreement to understand their obligations in managing confidential information and ensuring compliance by their staff and contractors.