Is a City Wide franchisee allowed to use trade secret information in any other business?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
9.1 Franchisee acknowledges that Franchisee's entire knowledge of the operation of a Franchised Business, including the knowledge, or know-how regarding the specifications, standards and operating procedures of the services and activities, is derived from information disclosed to Franchisee by CITY WIDE and that certain of such information is proprietary, confidential and a trade secret of CITY WIDE ("Confidential Information"). Franchisee will maintain the absolute confidentiality of all such Confidential Information during and after the Term and will not use any such information in any other business or in any manner not specifically authorized or approved in writing by CITY WIDE. However, Franchisee's obligation to maintain the confidentiality of such Confidential Information is subject to the following exceptions: (i) such information was previously known by Franchisee prior to disclosure by CITY WIDE if Franchisee identifies such information as previously known; (ii) information disclosed to Franchisee by a third party, unless the third party is under a duty not to disclose or use the information, or unless the third party is not in rightful possession of such information; or (iii) information generally known in the pertinent trade; such information shall be deemed generally known only if Franchisee can establish that the full particulars of the proprietary information in the combination disclosed to Franchisee is well known or generally used within the trade or industry.
Exceptions (i) to (iii) above will apply only if Franchisee notifies CITY WIDE of the pertinent exception within thirty (30) days after CITY WIDE discloses to Franchisee any Confidential Information.
In this Section, Confidential Information will not be considered to fall within the exceptions above merely because such information is embraced by or is part of more general information in the public domain or in Franchisee's possession. In addition, any combination of features will not be deemed to be within the foregoing exceptions merely because individual features are in the public domain and are in Franchisee's possession, but only if the combination itself, its principal of operation, knowledge or ability are in the public domain or in Franchisee's possession.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 42–43)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, franchisees are prohibited from using confidential or trade secret information in any other business. The FDD states that the franchisee’s knowledge of operating the franchised business comes from City Wide, and this information is proprietary, confidential, and considered a trade secret. This restriction applies both during the term of the franchise agreement and after its termination.
This means that a City Wide franchisee cannot leverage the knowledge, methods, specifications, processes, procedures, or improvements learned from City Wide to operate or invest in any competing business or any other venture without City Wide's explicit written authorization. The franchisee must maintain absolute confidentiality regarding this information.
However, there are exceptions to this rule. The franchisee's obligation to maintain confidentiality does not apply if (i) the information was already known by the franchisee prior to its disclosure by City Wide, provided the franchisee identifies it as such; (ii) the information was disclosed to the franchisee by a third party not under any duty of confidentiality and in rightful possession of the information; or (iii) the information is generally known in the relevant trade or industry. To claim these exceptions, the franchisee must notify City Wide within 30 days of the disclosure of the confidential information.
It is important to note that information is not considered within these exceptions merely because it is part of more general information in the public domain or in the franchisee's possession. Similarly, a combination of features is not exempt simply because individual features are public knowledge; the combination itself must be publicly known. City Wide can seek immediate equitable remedies, including restraining orders and injunctive relief, to protect its confidential information.