What is the Christian Brothers Automotive franchisee's obligation regarding the confidentiality of Know-How?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
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"). If required by Franchisor, the Nondisclosure Agreement must (a) be executed at the earlier of the commencement of employment or the commencement of training of the respective employee, and (b) comply with the law of the state where the Franchised Business is located including without limitation all requirements pertaining to the validity and enforceability of the Nondisclosure Agreement. The Nondisclosure Agreement will be in a form prescribed by Franchisor and will include, without limitation, specific identification of Franchisor as a third-party beneficiary of the Nondisclosure Agreement with the Franchise Agreement (Ver 04-14-2025) Franchisee:
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, franchisees have specific obligations regarding confidential information, including Know-How. During the term of the Franchise Agreement and thereafter, franchisees cannot communicate, divulge, or use confidential information for the benefit of any other entity. This includes the Confidential Operations Manual, systems of operation, products, services, procedures, policies, standards, criteria, customer information, data, and any other information designated as confidential by Christian Brothers Automotive.
Franchisees may disclose confidential information to their employees only if it is required for their job duties in operating the franchised business. In such cases, franchisees must ensure that employees maintain the confidentiality of the information. Christian Brothers Automotive may require franchisees to have their employees execute a Nondisclosure Agreement. If required, this agreement must be executed at the earlier of the commencement of employment or training and comply with the laws of the state where the franchised business is located.
The Nondisclosure Agreement will be in a form prescribed by Christian Brothers Automotive and will identify Christian Brothers Automotive as a third-party beneficiary with the right to enforce it. Franchisees must submit copies of all executed Nondisclosure Agreements to Christian Brothers Automotive within ten days of their execution. These measures are in place to protect Christian Brothers Automotive's proprietary information and maintain a competitive advantage.