Does the definition of 'Confidential Information' for a Chatime franchise include benchmarks for operation of a Franchised Business?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Confidential Information means any confidential, commercially sensitive or valuable information belonging to the Franchisor or its affiliates concerning the Franchisor or the Business System and includes, but is not limited to: (a) the provisions of the Franchise Agreement and any subject matter dealt with or contemplated therein; (b) all information concerning the Franchisor's business, the Business System, as it is now and in the future; (c) the Intellectual Property; (d) the methodology, affairs and procedures that the Franchisor specifies in the Business System that the Franchisee must use in the Franchised Business; (e) all information concerning the Franchisor's price lists, customer lists and client information, marketing and promotional procedures and activities, surveys, techniques, data, research and development, Franchisor's methodology and procedures for operating a Chatime Store Business, knowhow and trade secrets, processes and formula, benchmarks for operation of a Franchised Business, customer information, lists and data, strategies, marketing plans, business plans and information; (f) any accounting procedures or financial information used in the Business System; (g) the contents of the Manual and each of the other Franchise Documents; (h) the Software and computer software programs if any (other than commercially available software packages) developed or implemented by the Franchisor for use in the Franchised Business, whether it is written, conveyed orally, stored or recorded by electronic, magnetic or other means and whether in original form or recompiled; and (i) all other information of a confidential nature.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the definition of 'Confidential Information' does include benchmarks for the operation of a Franchised Business. This means that any information related to the standards Chatime sets for its franchise operations, which are used as a reference point for performance, is considered confidential.
As a prospective franchisee, this implies that you will have access to Chatime's operational benchmarks, but you must treat this information as confidential. You cannot share it with unauthorized parties, including competitors. This confidentiality extends to various forms of information, including written documents, electronic data, and even orally conveyed details.
Maintaining the confidentiality of these benchmarks is crucial for protecting Chatime's competitive advantage and the integrity of its business system. Failure to comply with these confidentiality requirements could result in legal repercussions or termination of the franchise agreement. Franchisees should carefully review the specific terms outlined in the Franchise Agreement and related documents to fully understand their obligations regarding confidential information.