If a Chatime franchisee learns information by reason of the franchise agreement, is it considered 'Confidential Information'?

According to Chatime's 2025 Franchise Disclosure Document, any information a franchisee learns or gains access to because of the Franchise Agreement is considered Confidential Information. This includes, but is not limited to, plans and specifications for the development of outlets, recipes, training materials, programs and systems, methods, techniques, formats, specifications, standards, procedures, sales and marketing techniques, computer software programs, statistical data, and knowledge of and experience relating to the development and operation of Outlets. Marketing and advertising programs, knowledge of specifications for and suppliers of raw materials, operating results, financial performance of Outlets, the Operations Manual, Global Policies and Procedures, information concerning the business and financial affairs of Chatime and their Affiliates, and the System Standards are also considered confidential.

Chatime franchisees are obligated to maintain the absolute confidentiality of this information both during the term of the Franchise Agreement and after its expiration or termination. They cannot use the Confidential Information in any other business operation or capacity and must not make unauthorized copies. Franchisees must also implement reasonable procedures to prevent unauthorized use or disclosure of the Confidential Information, including restrictions on disclosure to outlet personnel and others.

There are exceptions to these confidentiality restrictions. The restrictions do not apply to information that becomes publicly available without breach of the agreement, information the franchisee is legally compelled to disclose (provided they make best efforts to obtain confidential treatment), or information otherwise permitted to be disclosed under the terms of the Franchise Agreement. If required by Chatime, franchisees must ensure that their owner-managers, directors, shareholders, agents, employees, and any Interested Party enter into a confidentiality agreement acceptable to Chatime.

This broad definition of Confidential Information and the strict obligations surrounding it highlight the importance of safeguarding Chatime's proprietary knowledge and trade secrets. Prospective franchisees should carefully review these confidentiality provisions to understand the scope of their obligations and the potential consequences of any unauthorized disclosure or use of Confidential Information.