After the Bumble Roofing franchise agreement expires or is terminated, for how long are Franchisee and related parties restricted from using Confidential Information or Trade Secrets?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) After the Agreement expires or is terminated, Franchisee, and Franchisees' owners, guarantors, Designated Business Managers and employees who have access to the Confidential Information and Trade Secrets agree that for a period of 2 years after the termination or expiration of the Agreement (unless such information is a Trade Secret in which case the requirements in this Section 14.1(c) will remain in place for as long as such information constitutes a Trade Secret) they: (1) will not use the Confidential Information or Trade Secrets in any other business or capacity or for their own benefit; (2) will maintain the absolute confidentiality of the Confidential Information and Trade Secrets; (3) will not make unauthorized copies of any portion of the Confidential Information or Trade Secrets; and (4) will adopt and implement all reasonable procedures Franchisor periodically requires to prevent unauthorized use or disclosure of the Confidential Information and Trade Secrets including requiring written non-disclosure and noncompetition agreements for those individuals as Franchisor may require and provide Franchisor, at Franchisor's request, with signed copies of each of those agreements.
Franchisor will be designated as a third-party beneficiary on such nondisclosure and noncompetition agreements.
- (d) Notwithstanding the foregoing, the restrictions on the disclosure and use of the Confidential Information will not apply to the following: (a) Confidential Information in the public domain after it was communicated to Franchisee through no fault of Franchisee, its owners, Designated Business Managers or employees; (b) Confidential Information in Franchisee's possession free of any obligation of confidence at the time it was communicated to Franchisee; or (c) the disclosure of the Confidential Information in judicial or administrative proceedings to the extent that Franchisee is legally compelled to disclose the information, if Franchisee has notified Franchisor before disclosure and used Franchisee's best efforts, and afforded Franchisor the opportunity, to obtain an appropriate protective order or other assurance satisfactory to Franchisor of confidential treatment for the information required to be so disclosed.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, after the franchise agreement expires or is terminated, the franchisee, their owners, guarantors, designated business managers, and employees with access to confidential information and trade secrets are restricted from using this information. This restriction lasts for a period of two years after the termination or expiration of the agreement. However, if the information constitutes a trade secret, the restriction remains in place for as long as the information qualifies as a trade secret.
During this period, these individuals must not use the confidential information or trade secrets in any other business or for their own benefit. They are obligated to maintain the absolute confidentiality of this information and are prohibited from making unauthorized copies. Furthermore, they must implement reasonable procedures required by Bumble Roofing to prevent unauthorized use or disclosure, including requiring written non-disclosure and non-competition agreements from relevant individuals, and providing copies of these agreements to Bumble Roofing upon request.
There are exceptions to these restrictions. The restrictions do not apply to confidential information that becomes public through no fault of the franchisee, or if the franchisee possessed the information without any confidentiality obligation before it was communicated to them by Bumble Roofing. Additionally, disclosure of confidential information is permitted if legally compelled in judicial or administrative proceedings, provided that Bumble Roofing is notified beforehand and given the opportunity to obtain a protective order.
This clause is typical in franchise agreements to protect the franchisor's proprietary information and maintain a competitive advantage. Prospective Bumble Roofing franchisees should understand the scope and duration of these restrictions, as they could impact their ability to engage in similar business ventures after leaving the Bumble Roofing system. Franchisees should also seek legal counsel to fully understand their obligations and rights under these covenants.