Who is responsible for unauthorized disclosure of Proprietary Information by someone to whom a Body20 franchisee disclosed it?

According to Body20's 2025 Franchise Disclosure Document, the franchisee is liable to Body20 for any unauthorized use or disclosure of Proprietary Information by any employee or other person to whom the franchisee discloses Proprietary Information. This means that if a Body20 franchisee shares confidential information with an employee, contractor, or any other individual, and that person then uses or reveals the information without authorization, the franchisee is held responsible to Body20 for the breach.

This responsibility extends to taking reasonable precautions to protect the Proprietary Information from unauthorized use or disclosure. The franchisee must implement any systems, procedures, or training programs that Body20 requires to safeguard this information. This could include measures such as secure data storage, employee training on confidentiality, and protocols for handling sensitive documents.

Furthermore, at Body20's request, the franchisee must ensure that anyone who has access to Proprietary Information executes non-disclosure agreements. These agreements should identify Body20 as a third-party beneficiary, giving Body20 the independent right to enforce the agreement directly. This provides Body20 with an additional layer of protection and recourse in case of unauthorized disclosure.

This clause highlights the importance of franchisees maintaining strict control over Proprietary Information and taking proactive steps to prevent unauthorized access or disclosure. The franchisee's liability underscores the need for thorough vetting of employees and contractors, robust security measures, and ongoing training to ensure that everyone who handles Proprietary Information understands their obligations and the potential consequences of a breach.