Under what conditions can a Casiola franchisee disclose Confidential Information to a third party?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
- (j) Franchisee discloses, divulges, provides access to, communicates, and/or permits the communication of Confidential Information to any third party not otherwise authorized by
Franchisor;
Franchisee agrees that the foregoing covenants and obligations shall also apply to: (a) Franchisee's Owners and that Franchisee's Owners shall each execute and deliver to Franchisor the Franchise Owner Agreement and Guaranty in the form attached to this Agreement as Exhibit 1; and (b) Franchisee's directors, officers, employees and agents where disclosure of the Confidential Information was necessary for the operations of the Franchised Business and where such director, officer, employee and/or agent previously executed and timely delivered to Franchisor the Confidentiality Agreement in the form attached as Exhibit 2.
Franchise Agreement Exhibit 2 Confidentiality Agreement
THIS EXHIBIT IS FOR REFERENCE PURPOSES ONLY AS A SAMPLE FORM CONFIDENTIALITY AGREEMENT THAT FRANCHISOR MAY APPROVE FOR USE BY FRANCHISEE – BEFORE USING WITH AN EMPLOYEE OR CONTRACTOR FRANCHISEE SHOULD HAVE THIS AGREEMENT REVIEWED AND APPROVED BY AN INDEPENDENT LOCAL ATTORNEY HIRED BY FRANCHISEE
CONFIDENTIALITY AGREEMENT (Sample Only)
WHEREAS, our franchisor, Casiola Franchise LLC is not a party to this agreement and does not own or manage the Casiola Business but is an intended third party beneficiary of this Agreement;
Franchisee agrees that with regard to the Franchised Business all customer lists and their contents and information represent Confidential Information and constitute an asset of Franchisor whether or not such information was supplied by Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, a franchisee can disclose Confidential Information to a third party if the third party is authorized by Casiola. Additionally, disclosure is permitted to the franchisee's directors, officers, employees, and agents if such disclosure is necessary for the operation of the franchised business. However, these individuals must have previously executed and delivered a Confidentiality Agreement in the form attached to the Franchise Agreement as Exhibit 2.
This means that as a Casiola franchisee, you must ensure that anyone who gains access to Confidential Information, such as employees or contractors, signs a confidentiality agreement. This agreement legally binds them to protect the information and prevents unauthorized use or disclosure. The franchisor, Casiola Franchise LLC, is considered a third-party beneficiary of this agreement, even though they are not a direct party to it, giving them the right to enforce the agreement.
The Confidentiality Agreement included in the FDD is a sample and Casiola recommends that franchisees have the agreement reviewed and approved by an independent local attorney before using it with an employee or contractor. This step is crucial to ensure that the agreement complies with local laws and adequately protects Casiola's Confidential Information. The franchisee bears the responsibility for ensuring these agreements are in place and legally sound.
Customer lists and their contents are considered Confidential Information and an asset of Casiola, regardless of who supplied the information. Franchisees must disclose any ideas, concepts, methods, or products they develop related to the Casiola business to the franchisor. Casiola is not obligated to provide any payment or consideration for these disclosures, and the franchisee cannot use these concepts without Casiola's prior written approval. This highlights the importance of protecting Confidential Information and adhering to the franchisor's guidelines to avoid potential breaches of the franchise agreement.