What constitutes a material violation of confidentiality that could lead to termination of the Bombs Away franchise agreement?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (v) Franchisee or any Owner commits a material violation of Section 7.2 (compliance with laws) or Section 13.1 (confidentiality), violates Section 13.2 (non-compete) or Article 15 (transfer), or commits any other violation of this Agreement which by its nature cannot be cured;
ARTICLE 13. COVENANTS
13.1 Confidential Information. With respect to all Confidential Information, Franchisee shall (a) adhere to all procedures prescribed by Bombs Away Franchising for maintaining confidentiality, (b) disclose such information to its employees only to the extent necessary for the operation of the Business; (c) not use any such information in any other business or in any manner not specifically authorized in writing by Bombs Away Franchising, (d) exercise the highest degree of diligence and effort to maintain the confidentiality of all such information during and after the term of this Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized disclosure or use of Confidential Information. Franchisee acknowledges that all Confidential Information is owned by Bombs Away Franchising (except for Confidential Information which Bombs Away Franchising licenses from another person or entity). This Section will survive the termination or expiration of this Agreement indefinitely.
13.3 General Manager and Key Employees. If requested by Bombs Away Franchising, Franchisee will cause its general manager and other key employees to sign Bombs Away Franchising's then-current form of confidentiality and non-compete agreement (unless prohibited by applicable law).
- 11.5 Business Data. All customer data and other non-public data generated by the Business is Confidential Information and is exclusively owned by Bombs Away Franchising.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, a material violation of Section 13.1 (confidentiality) can lead to the termination of the franchise agreement. Section 13.1 outlines the franchisee's responsibilities regarding confidential information.
To maintain confidentiality, the franchisee must adhere to all procedures prescribed by Bombs Away, disclose confidential information to employees only to the extent necessary for business operations, and avoid using such information in any other business or manner not specifically authorized by Bombs Away in writing. Franchisees must also exercise the highest degree of diligence to protect this information both during and after the franchise agreement term. Copying or reproducing confidential information is prohibited, and any unauthorized disclosure or use must be promptly reported.
This obligation extends beyond the franchisee to include their general manager and other key employees, who may be required to sign confidentiality and non-compete agreements. Furthermore, all customer data and other non-public data generated by the business is considered confidential information exclusively owned by Bombs Away. These confidentiality obligations survive the termination or expiration of the franchise agreement indefinitely, underscoring the importance Bombs Away places on protecting its proprietary information.