factual

Does the Chem Dry franchise agreement require franchisees to keep Confidential Information confidential after the agreement's term?

Chem_Dry Franchise · 2024 FDD

Answer from 2024 FDD Document

no circumstance will CDI be obligated to reimburse FRANCHISEE for any loss of revenue or goodwill associated with any modified or discontinued Marks or for any expenditures made by FRANCHISEE to promote a modified or substitute trademark or service mark.

5. CONFIDENTIAL INFORMATION

  1. CDI possesses (and will continue to develop and acquire) certain confidential information relating to, without limitation, the methods, techniques, formats, specifications, procedures, information, systems, sales and marketing techniques and knowledge of and experience in the development, operation and franchising of CHEM-DRY Businesses (the "Confidential Information"). CDI will disclose the Confidential Information to FRANCHISEE in the training program, the Manual and/or in guidance furnished to FRANCHISEE. FRANCHISEE acknowledges that the Confidential Information is proprietary and/or involves trade secrets of CDI and that FRANCHISEE will not acquire any interest in the Confidential Information, other than the right to utilize it as CDI specifies in the operation of the BUSINESS during the term of this Agreement. FRANCHISEE acknowledges and agrees that the Confidential Information is disclosed to FRANCHISEE only on the condition that FRANCHISEE agrees, and FRANCHISEE in fact does agree, that FRANCHISEE:
  • a. will not use or disclose Confidential Information in or to any other business or in any capacity;
  • b. will keep each item deemed to be part of Confidential Information absolutely confidential, both during and after this Agreement's Term;
  • c. will not make unauthorized copies of any Confidential Information disclosed via electronic medium or in written or other tangible form; and
  • d. will require each employee of the BUSINESS, at the time of employment, to sign a confidentiality agreement agreeing to maintain the confidentiality of the Confidential Information. CDI has the right to regulate the form of agreements that FRANCHISEE uses.
    1. FRANCHISEE agrees that the list of FRANCHISEE's current customers, former customers and those who have inquired about the services provided by the BUSINESS (the "Customer List") shall be included in the Confidential Information, shall be the property of CDI and shall constitute a trade secret of CDI. FRANCHISEE agrees that it does not own the Customer List and that it will not disclose the Customer List, or any portion thereof, to any person or entity other than CDI or its designee, either during the term of this Agreement or thereafter. FRANCHISEE agrees to only use the Customer List in the operation of the BUSINESS and in accordance with this Agreement.
    1. Confidential Information does not include information, knowledge, or know how which FRANCHISEE can demonstrate lawfully came to FRANCHISEE'S attention before CDI provided it to FRANCHISEE directly or indirectly; which, at the time CDI disclosed it to FRANCHISEE, already had lawfully become generally known in the industry through publication or communication by others (without violating an obligation to CDI); or which, after CDI discloses it to FRANCHISEE, lawfully becomes generally known in the industry through publication or communication by others (without violating an obligation to CDI). However, if CDI includes any matter in Confidential Information, anyone who claims that it is not Confidential Information carries the burden of proof that one of the exclusions provided in this paragraph applies.
    1. All ideas, concepts, techniques, or materials relating to a CHEM-DRY Business, whether protectable intellectual property and whether created by or for FRANCHISEE or FRANCHISEE'S Owners or employees, must be promptly disclosed to CDI and will be deemed to be CDI's sole and exclusive property, part of the Franchise System, and works made-for-hire for CDI.

Source: Item 23 — Receipts (FDD pages 68–264)

What This Means (2024 FDD)

According to Chem Dry's 2024 Franchise Disclosure Document, franchisees are required to maintain the confidentiality of Chem Dry's Confidential Information both during and after the term of the Franchise Agreement. The franchisee agrees they will not use or disclose Confidential Information in any other business or capacity and will keep each item deemed part of Confidential Information absolutely confidential, even after the agreement terminates. Unauthorized copies of Confidential Information are prohibited, whether disclosed via electronic medium, written form, or other tangible formats.

Chem Dry also considers the customer list, which includes current customers, former customers, and those who have inquired about Chem Dry's services, as Confidential Information and a trade secret. Franchisees do not own the Customer List and cannot disclose it to any person or entity other than Chem Dry or its designee, either during or after the agreement term. The franchisee can only use the Customer List for operating the Chem Dry business as outlined in the Franchise Agreement.

Upon the expiration or termination of the Franchise Agreement, franchisees must immediately stop using any of Chem Dry's Confidential Information, including software, technology, digital passwords, and identifications. They must also return all copies of the Manual and any other confidential materials that Chem Dry has provided, including proprietary equipment. Non-proprietary equipment bearing Chem Dry's marks must be returned or have the marks removed. Franchisees must also provide Chem Dry with access to the Customer List, including customer names, addresses, phone numbers, email addresses, and last service dates.

Disclaimer: This information is extracted from the 2024 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.