What procedures must a Chatime franchisee adopt to prevent unauthorized use or disclosure of Confidential Information?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
8 Confidential Information
- 8.1 Obligation to Maintain Confidentiality
- (1) Franchisee and Guarantor acknowledge and agree that neither Franchisee nor any Guarantor will acquire any interest in the Confidential Information, other than the right to utilize the Confidential Information in performing their obligations under this Agreement, and that the use or duplication of any Confidential Information would constitute an unfair method of competition.
- (2) Franchisee and Guarantor hereby agree that during the term of this Agreement and following the expiration or termination of this Agreement that they:
- (a) Will not use the Confidential Information in any other business operation or capacity;
- (b) Will maintain the absolute confidentiality of the Confidential Information;
- (c) Will not make unauthorized copies of any portion of the Confidential Information;
- (d) Will adopt and implement all reasonable procedures that Franchisor prescribes from time to time to prevent unauthorized use or disclosure of the Confidential Information including, without limitation, restrictions on the disclosure of the Confidential Information to Outlet personnel and others; and
- (3) Notwithstanding anything to the contrary contained in this Agreement, the restrictions set out in clause 8.1(2) will not apply to information that:
- (a) Is or becomes publicly available, other than by breach of this Agreement;
- (b) Franchisee or Guarantor (as applicable) is legally compelled to disclose, provided Franchisee/Guarantor must have used its 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 disclosed; or
- (c) Is otherwise permitted under the terms of this Agreement.
- (4) If required by Franchisor, Franchisee must ensure that Franchisee's Owner managers, directors, shareholders, agents, employees, and any Interested Party enter into a confidentiality agreement in a form that is acceptable to Franchisor.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees must adopt and implement all reasonable procedures that Chatime prescribes from time to time to prevent unauthorized use or disclosure of confidential information. These procedures include, without limitation, restrictions on the disclosure of confidential information to outlet personnel and others.
Chatime franchisees and guarantors acknowledge that they will not acquire any interest in the confidential information, other than the right to utilize it in performing their obligations under the Franchise Agreement. The use or duplication of any confidential information would constitute an unfair method of competition. Franchisees also agree not to use the confidential information in any other business operation or capacity and to maintain the absolute confidentiality of the confidential information.
Furthermore, franchisees agree not to make unauthorized copies of any portion of the confidential information. If required by Chatime, franchisees must ensure that their owner managers, directors, shareholders, agents, employees, and any interested party enter into a confidentiality agreement in a form that is acceptable to Chatime. These measures aim to protect Chatime's confidential information, which includes plans and specifications for the development of the outlet, 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 the outlet.