Is a Chem Dry franchisee allowed to use or disclose Confidential Information in any other business?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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.
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.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, franchisees are explicitly prohibited from using or disclosing confidential information in any other business or capacity. Chem Dry defines confidential information as methods, techniques, formats, specifications, procedures, information, systems, sales and marketing techniques, and knowledge related to the development, operation, and franchising of Chem Dry businesses. This information is disclosed to the franchisee during training, in the manual, and through ongoing guidance.
Chem Dry franchisees acknowledge that this confidential information is proprietary and constitutes trade secrets of Chem Dry. Franchisees agree not to acquire any interest in the confidential information beyond the right to use it as specified by Chem Dry for operating their franchise during the term of the agreement. This restriction extends both during and after the franchise agreement's term, ensuring the protection of Chem Dry's proprietary assets.
Furthermore, Chem Dry includes the customer list (comprising current, former, and prospective customers) as part of the confidential information, emphasizing that it is the property of Chem Dry and a trade secret. Franchisees are permitted to use the customer list solely for the operation of their Chem Dry business and in accordance with the franchise agreement. This prevents franchisees from leveraging this information for any other business ventures, safeguarding Chem Dry's customer relationships and market position.