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Are there any exceptions to the confidentiality obligations for Chatime Developers and Guarantors regarding Confidential Information?

Chatime Franchise · 2025 FDD

Answer from 2025 FDD Document

wledges that Franchisor has a prior and superior right to registration of any such domain names. If a domain name or Internet address is to be used in Developer's Operation, it must be registered in the name of Franchisor or any other nominee of Franchisor. However, all fees must be paid by Developer.

  • (3) Franchisor may, but is not obliged to, designate one or more web pages to describe Developer and/or the Outlets, such web pages to be located within Franchisor's Website.
  • (4) If Developer becomes aware of any Person using or referring to the Marks on their Website, then it must immediately notify Franchisor.

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, there are specific exceptions to the confidentiality obligations for Developers and Guarantors. These exceptions outline situations where the restrictions on using and disclosing confidential information do not apply.

Specifically, the confidentiality restrictions do not apply to information that becomes publicly available through no fault of the Developer or Guarantor, or if the Developer or Guarantor is legally compelled to disclose the information. However, in the case of legally compelled disclosure, the Developer/Guarantor must make their best effort to obtain a protective order or assurance of confidential treatment that is satisfactory to Chatime.

Furthermore, the restrictions do not apply to information that is otherwise permitted to be disclosed under the terms of the Development Agreement. Additionally, the confidentiality obligations do not prevent the Developer or Guarantor from owning less than 5% of securities in a listed corporation, engaging in the Developer's Operation as per the agreement, or engaging in any business or activity for which Chatime has provided prior written consent. These exceptions provide some flexibility to the Developer and Guarantor while still protecting Chatime's confidential information.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.