What is the purpose of the 'WHEREAS' clauses in the Cinch I.T. Franchise Agreement amendment?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
WHEREAS, CINCH I.T. SYSTEM includes but is not limited to certain trade names, trademarks, trade dress and logos including, but not limited to, the mark CINCH I.T., service marks, trade symbols, trade dress, signs, slogans, associated logos, designs, emblems, URLs, domain names, Website addresses, e-mail addresses, digital cellular addresses, wireless Web addresses and the like and copyrights and such other trade names and trademarks as Franchisor may develop in the future for the purposes of identifying CINCH I.T. SYSTEM, and such other distinguishing characteristics of CINCH I.T. SYSTEM including, without limitation, distinctive sales and marketing procedures; knowledge and procedures for providing business computer support, general I.T. support, and other technology related services; inventory, management and financial control methods; and training and assistance, all of which may be changed, improved and further developed by Franchisor from time to time ("Trade Secrets");
WHEREAS, Franchisor's Trade Secrets provide economic advantages to Franchisor and are not generally known to or readily ascertainable by proper means by Franchisor's competitors who could obtain economic value from knowledge and use of Franchisor's Trade Secrets;
WHEREAS, Franchisor has taken and intends to take all reasonable steps to maintain the confidentiality and secrecy of Franchisor's Trade Secrets;
WHEREAS, Franchisor and Franchisee desire to enter into a Franchise Agreement which will grant Franchisee a limited right to operate a Franchised Business within a territory using CINCH I.T. SYSTEM and Franchisor's Trade Secrets for a period defined in the Franchise Agreement ("Franchise Agreement");
WHEREAS, Franchisor and Franchisee have agreed in the Franchise Agreement on the importance to Franchisor and to Franchisee and other licensed users of CINCH I.T. SYSTEM of restricting use, access and dissemination of Franchisor's Trade Secrets; and
WHEREAS, it is anticipated that Signer may have access to learn Franchisor's Trade Secrets as Franchisee develops and maintains Franchisee's Business using CINCH I.T. SYSTEM.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, the 'WHEREAS' clauses in the Franchise Agreement amendment serve to define the context and purpose of the agreement, particularly concerning Cinch I.T.'s trade secrets and the franchisee's role in using and protecting them. These clauses establish the foundation upon which the agreement is built, outlining the intentions and understandings of both Cinch I.T. and the franchisee.
The 'WHEREAS' clauses specifically highlight that the Cinch I.T. system includes trade names, trademarks like the CINCH I.T. mark, service marks, logos, and other intellectual property. It emphasizes that Cinch I.T.'s trade secrets provide economic advantages and are not easily accessible to competitors. These clauses also state that Cinch I.T. takes measures to maintain the confidentiality of these trade secrets.
Furthermore, the clauses express the mutual desire of Cinch I.T. and the franchisee to enter into a Franchise Agreement, granting the franchisee the right to operate a franchised business using the Cinch I.T. system and trade secrets within a defined territory. They acknowledge the importance of restricting the use, access, and dissemination of Cinch I.T.'s trade secrets to protect the system's integrity and competitive advantage. Finally, the clauses recognize that the franchisee may gain access to these trade secrets as they develop and maintain their business using the Cinch I.T. system. These recitals lay the groundwork for the subsequent agreement, which outlines the specific obligations and responsibilities of both parties in protecting and utilizing Cinch I.T.'s confidential information.