Who retains the ownership of the Confidential Information provided to the Buff City Soap franchisee?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee and its Principals each acknowledges that Franchisor may provide Franchisee and its Principals with Confidential Information that derives value from not being generally known in the industry and that are reasonably necessary for the operation of the Makery and, further, that Franchisee has entered into this Agreement in order to use such Confidential Information to the economic benefit of Franchisee.
Franchisee agrees that Confidential Information remains the sole property of Franchisor.
Franchisor will take reasonable steps to mark as "confidential" or "proprietary" any Confidential Information that it deems as such, but the failure to mark such Confidential Information will not cause it to be public information or otherwise not protected as Confidential Information.
Franchisee and each of its Principals will not use, duplicate or disclose to others any Confidential Information except as expressly authorized by Franchisor in writing and will implement measures to maintain the confidentiality of such Confidential Information that is no less strict than the measures Franchisee uses with its own confidential information.
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, Buff City Soap retains sole ownership of its confidential information provided to franchisees. This information, which includes trade secrets, methodologies, manuals, and other proprietary data related to the Buff City Soap system, remains the exclusive property of the franchisor.
This means that while franchisees are granted the right to use this confidential information to operate their Buff City Soap makery, they do not own it. They are obligated to protect it and can only use it as expressly authorized by Buff City Soap. This obligation extends to the franchisee's principals, who must also acknowledge that the confidential information derives value from not being generally known in the industry and is reasonably necessary for the operation of the Makery.
Buff City Soap may mark confidential information as such, but even if it doesn't, the information is still protected. Franchisees must implement measures to maintain the confidentiality of the information, using precautions no less strict than those they use to protect their own confidential information. This underscores the importance of safeguarding Buff City Soap's proprietary information to maintain the brand's competitive edge.
Upon termination of the Franchise Agreement, franchisees must return all confidential information, including manuals and any other proprietary materials, to Buff City Soap. They must also cease using the system and confidential information in any business or otherwise. This ensures that the franchisor's intellectual property remains protected and that former franchisees do not use it to compete with the Buff City Soap system.