Does the confidentiality clause in the Chocolate Fish Coffee franchise agreement have any exceptions?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
With respect to all Confidential Information, Franchisee shall (a) adhere to all procedures prescribed by Chocolate Fish Franchising for maintaining confidentiality, (b) disclose such information to its employees only to the extent necessary for the operation of the Business; (c) not use any such information in any other business or in any manner not specifically authorized in writing by Chocolate Fish Franchising, (d) exercise the highest degree of diligence and effort to maintain the confidentiality of all such information during and after the term of this Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized disclosure or use of Confidential Information. Franchisee acknowledges that all Confidential Information is owned by Chocolate Fish Franchising (except
for Confidential Information which Chocolate Fish Franchising licenses from another person or entity). This Section will survive the termination or expiration of this Agreement indefinitely.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to the 2024 Chocolate Fish Coffee Franchise Disclosure Document, the confidentiality clause has an exception. The franchisee does not own the confidential information, Chocolate Fish Coffee does, except for confidential information that Chocolate Fish Coffee licenses from another person or entity.
This means that while franchisees are bound to protect Chocolate Fish Coffee's proprietary information, there is an exception for information that Chocolate Fish Coffee itself has licensed from a third party. In such cases, the ownership and control of that specific confidential information may be subject to the terms of the licensing agreement between Chocolate Fish Coffee and the original licensor.
As a prospective franchisee, it would be prudent to understand what specific types of confidential information fall under this exception and what obligations Chocolate Fish Coffee has to the original licensor. This understanding can help a franchisee navigate their responsibilities and avoid potential conflicts related to the use and protection of licensed confidential information.