Is the confidentiality clause in the Christian Brothers Automotive agreement applicable to both the franchisee and franchisor?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor is willing to provide Franchisee with ongoing access to Franchisor's
Confidential Information only if Franchisor is assured by Franchisee that
Franchisee will not use such Confidential Information to compete with Franchisor,
nor disclose any such Confidential Information to any party without Franchisor's
prior written consent.
7. CONFIDENTIAL INFORMATION.
7.01 Non-Use and Non-Disclosure of Confidential Information. Except as otherwise stated herein, Franchisee shall not, during the term of this Agreement or at any time thereafter, communicate, divulge or use for the benefit of any other person, persons, partnership, association, corporation or entity the Confidential Operations Manual, any information, knowledge or Know-How concerning the systems of operation, products, services, procedures, policies, standards, criteria or Customers, Customer Information, Data and/or any other information which Franchisor designates in other sections of this Agreement or elsewhere as confidential (collectively "Confidential Information"). Franchisee may disclose Confidential Information that is required for the operation of the Franchised Business to its employees who must have access to it in order to perform their job duties for the operation of the Franchised Business. Franchisee shall take such precautions to ensure that its employees retain such information in confidence, including when Franchisor deems it appropriate, the execution by each such employee of a nondisclosure and noncompetition agreement provided by Franchisor (the "Nondisclosure Agreement").
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, the confidentiality clause primarily focuses on the franchisee's obligations regarding the franchisor's confidential information. The agreement specifies that the franchisor is willing to provide the franchisee with ongoing access to the franchisor's confidential information only if the franchisor is assured that the franchisee will not use this information to compete with the franchisor or disclose it to any third party without prior written consent. This indicates a unilateral obligation placed on the franchisee to protect the franchisor's proprietary information.
Christian Brothers Automotive franchisees are prohibited from communicating, divulging, or using confidential information, including the Confidential Operations Manual, systems of operation, products, services, procedures, policies, standards, criteria, customer data, and any other information designated as confidential by the franchisor. This restriction applies both during the term of the agreement and at any time thereafter. Franchisees may only disclose confidential information to their employees who need access to it for their job duties, provided they take precautions to ensure their employees maintain confidentiality, including executing a non-disclosure and non-competition agreement if deemed necessary by Christian Brothers Automotive.
The agreement also outlines the measures Christian Brothers Automotive franchisees must take to protect customer information, including complying with privacy laws and policies, maintaining data security, and indemnifying the franchisor against losses arising from any misuse of customer information. While the franchisor also has obligations to protect certain information, the primary emphasis of the confidentiality clauses is on preventing the franchisee from misusing or disclosing the franchisor's proprietary and confidential information, ensuring the protection of the Christian Brothers Automotive system and brand.
In summary, while both parties are expected to maintain certain levels of confidentiality, the Christian Brothers Automotive franchise agreement places a stronger emphasis and more explicit obligations on the franchisee to protect the franchisor's confidential information and customer data. A prospective franchisee should carefully review Section 7, titled "CONFIDENTIAL INFORMATION," and Section 16, "COVENANTS NOT TO COMPETE," within the franchise agreement to fully understand the scope and implications of these confidentiality obligations.