Does the Bombs Away Guaranty specify any geographic limitations on the use of confidential information?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
With respect to all Confidential Information Guarantor shall (a) adhere to all security 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 or approved in writing by Bombs Away Franchising, (d) exercise the highest degree of diligence and make every effort to maintain the confidentiality of all such information during and after the term of the Franchise Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized disclosure or
use of Confidential Information. Guarantor acknowledges that all Confidential Information is owned by Bombs Away Franchising or its affiliates (except for Confidential Information which Bombs Away Franchising licenses from another person or entity). Guarantor acknowledges that all customer data generated or obtained by Guarantor is Confidential Information belonging to Bombs Away Franchising. This Section will survive the termination or expiration of the Franchise Agreement indefinitely.
3. Covenants Not to Compete.
- (a) Restriction In Term.
During the term of the Franchise Agreement, Guarantor shall not directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor.
- (b) Restriction Post Term.
For two years after the Franchise Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer by Guarantor), Guarantor shall not directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor operating in any of Franchisee's Territory or the territory of any other Bombs Away business operating on the date of termination or transfer, as applicable.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to the 2024 Bombs Away Franchise Disclosure Document, the Guaranty agreement outlines restrictions regarding the use of confidential information, but it does not explicitly define geographic limitations on its use. The Guarantor must adhere to security procedures, limit disclosure to employees, avoid unauthorized use, maintain confidentiality, and report any unauthorized disclosures. These obligations regarding confidential information extend indefinitely beyond the termination or expiration of the Franchise Agreement.
However, the Guaranty does include geographic limitations within its non-compete clauses. During the term of the Franchise Agreement, the Guarantor cannot be involved with any competitor. Post-term, for two years after the agreement expires or is terminated, the Guarantor is restricted from engaging with a competitor operating within the franchisee's territory or the territory of any other Bombs Away business operating at the time of termination or transfer.
In practical terms, while the Guarantor's obligation to protect confidential information applies without specific geographic boundaries, their ability to engage with competing businesses is limited to specific territories for a defined period after the franchise agreement ends. A prospective franchisee should seek clarification from Bombs Away regarding how the confidential information restrictions might affect their activities outside the defined territories and after the non-compete period expires.