During and after the term of the Chatime agreement, what is a developer prohibited from doing with the Confidential Information?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
6 Confidential Information
- 6.1 Obligation to Maintain Confidentiality
- (1) Developer and Guarantor acknowledge and agree that neither Developer 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) Developer 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; and
- (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 Franchisees, Outlet personnel and others;
- (3) Notwithstanding anything to the contrary contained in this Agreement, the restrictions set out in clause 6.1(2) will not apply to information that:
- (a) Is or becomes publicly available, other than by breach of this Agreement;
- (b) Developer or Guarantor (as applicable) is legally compelled to disclose, provided Developer/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, Developer must ensure that Developer'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, the developer and guarantor agree that during the term of the agreement, and following its expiration or termination, they will adhere to specific restrictions regarding confidential information. They are prohibited from using the confidential information in any other business operation or capacity. They must maintain the absolute confidentiality of the confidential information, and they cannot make unauthorized copies of any portion of it.
To prevent unauthorized use or disclosure of confidential information, the developer and guarantor must adopt and implement all reasonable procedures that Chatime prescribes from time to time. These procedures include restrictions on disclosing confidential information to franchisees, outlet personnel, and others.
However, these restrictions do not apply to information that becomes publicly available without breaching the agreement, information that the developer or guarantor is legally compelled to disclose (provided they have made their best efforts to obtain a protective order), or information that is otherwise permitted under the terms of the agreement. If required by Chatime, the developer must ensure that their owner managers, directors, shareholders, agents, employees, and any interested party enter into a confidentiality agreement acceptable to Chatime.