Besides employees and agents, under what conditions can a Caring Transitions franchisee divulge confidential information to others?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
ARTICLE 10
CONFIDENTIAL INFORMATION
- 10.1 Use of Confidential Information. Franchisee shall not, during the term of this agreement or thereafter, communicate, divulge, or use for the benefit of any other person, persons, partnership, association or corporation, any confidential information, knowledge, or know-how concerning the franchised business, the system, or methods of operation that may be communicated to Franchisee, or of which Franchisee may be apprised, by virtue of Franchisee's business operations under the terms of this agreement ("confidential information"). "Confidential information" includes the identities and personal and contact information of clients of the franchised business, financial statements, results of operations, sales, income, expense, and other financial information and records of the franchised business, and all electronic information, lists and data related to past, present and future clients of any franchise, including any franchise operated by Franchisee. Franchisee shall divulge confidential information only to such of its employees, agents, or professional advisors as must have access to it in order to operate the franchised business as described herein, or with Franchisor's prior written consent. In connection therewith, Franchisee shall be fully responsible for ensuring that its employees, agents, and professional advisors comply with this section.
- 10.2 Remedies.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, a franchisee is generally prohibited from communicating, divulging, or using confidential information related to the franchised business, system, or methods of operation for the benefit of any other party. This restriction applies both during and after the term of the franchise agreement. Confidential information includes client identities and contact details, financial statements, sales data, and electronic data related to clients.
However, a Caring Transitions franchisee can disclose confidential information under two specific conditions. First, they may divulge confidential information to their professional advisors if those advisors need access to the information to help operate the franchised business. Second, a franchisee can disclose confidential information if they obtain prior written consent from Caring Transitions. In both cases, the franchisee is responsible for ensuring that these parties maintain the confidentiality of the information.
Furthermore, when transferring a franchise, a Caring Transitions franchisee must comply with Section 10.3 regarding confidential information disclosure to prospective transferees. This implies that some level of confidential information may need to be shared with potential buyers as part of the transfer process, within the bounds of Section 10.3. If a franchisee fails to comply with these confidentiality requirements, Caring Transitions could suffer irreparable injury, and the franchisee may be liable for court costs and attorney's fees incurred by Caring Transitions in enforcing these provisions.