After termination of the Body20 franchise agreement, can a franchisee profit from Proprietary Information?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchisee Parties may not use any Proprietary Information or sell, trade, or otherwise profit in any way from any Proprietary Information at any time following the expiration or termination of this Agreement.
15.5 Cease Identification with Us. You must immediately take, and cause the Franchisee Parties to take, all action required (i) to cancel all assumed name or equivalent registrations relating to your use of the Marks and (ii) to, in accordance with our directions, cancel or transfer to us or our designee all authorized and unauthorized domain names, social media accounts, telephone numbers, post office boxes, and classified and other directory listings relating to, or used in connection with, the Studio or the Marks (collectively, "Identifiers"). You acknowledge that as between any of the Franchisee Parties and us and our Affiliates, we and our Affiliates have the sole rights to and interest in all Identifiers. If you fail to comply with this Section 15.5, you hereby authorize us and irrevocably appoint us or our designee as your attorney-in-fact to direct the telephone company, postal service, registrar, Internet Service Provider, and all listing agencies or providers to transfer such Identifiers to us. The telephone company, the postal service, registrars, Internet Service Providers listing agencies, and other providers may accept such direction by us pursuant to this Agreement as conclusive evidence of our exclusive rights in such Identifiers and our authority to direct their transfer.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, franchisees are prohibited from profiting from Proprietary Information after the franchise agreement expires or is terminated. The FDD states that franchisees and their owners cannot use any Proprietary Information or sell, trade, or otherwise profit from it in any way once the agreement is no longer in effect.
Furthermore, upon termination or expiration of the Body20 franchise agreement, franchisees must take immediate action to erase all copies of Proprietary Information, proprietary software, and Other Materials from their computer systems, email accounts, and other digital storage systems. Franchisees must also provide certification that all copies of Proprietary Information have been returned or destroyed.
These stipulations are designed to protect Body20's confidential business assets and maintain the integrity of its franchise system. Failure to comply with these requirements could result in legal action from Body20.