What is the City Wide franchisee's obligation regarding the confidentiality of Confidential Information during and after the term of the franchise agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
ion of this Agreement. For the elimination of doubt, the entire Operating Manual is designated as confidential.
- 8.4 Failure to follow the mandatory specifications and standards set forth in the Operating Manual, as amended from time to time, constitute a material breach of this Agreement. If such material breach is not cured within thirty (30) days of receipt of the written notice of default from CITY WIDE, CITY WIDE may terminate this Agreement.
SECTION 9. Confidential Information
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.
- 9.2 Franchisee will divulge such Confidential Information only to the extent and only to those of Franchisee's employees who must have access to operate the Franchised Business. All information, knowledge and know-how, including, without limitation, specifications and standards concerning the operation of the Franchised Business and other data which CITY WIDE designates as Confidential Information, will be deemed confidential for purposes of this Agreement.
- 9.3 Due to the special and unique nature of the Confidential Information, Marks, Operating Manual and Software, Franchisee acknowledges that CITY WIDE will be entitled to immediate equitable remedies, including but not limited to, restraining orders and injunctive relief in order to safeguard such proprietary, confidential, unique, and special information of CITY WIDE and that money damages alone would be an insufficient remedy with which to compensate CITY WIDE for any breach of the terms of Sections 5, 8 and 9 of this Agreement. Furthermore, Franchisee agrees that Franchisee will require all Franchisee's employees who have access to the Confidential Information and Software of CITY WIDE to execute a confidentiality agreement in a form acceptable to CITY WIDE which is substantially like to Attachment E to this Agreement.
9.4 CITY WIDE MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALIDITY OR ENFORCEABILITY OF ANY TRADE SECRET.
**SECTION 10.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, franchisees must maintain the absolute confidentiality of City Wide’s Confidential Information both during and after the franchise term. This information includes knowledge of the operation of the franchised business, specifications, standards, and operating procedures. Franchisees are prohibited from using this information in any other business or manner not specifically authorized by City Wide in writing. This obligation extends beyond the termination of the Franchise Agreement.
There are a few exceptions to this confidentiality obligation. These exceptions include information that was already known by the franchisee prior to its disclosure by City Wide, information disclosed to the franchisee by a third party not under a duty of confidentiality, or information generally known in the pertinent trade. To claim these exceptions, the franchisee must notify City Wide within thirty days after City Wide discloses the Confidential Information.
The Franchise Agreement specifies that the Operating Manual contains proprietary information of City Wide and is considered Confidential Information. Franchisees must not disclose, duplicate, or use any portion of the Operating Manual in an unauthorized manner. At the end of the franchise term, franchisees must cease using and destroy all tangible copies of the Operating Manual, the Software, and all other Confidential Information, retaining no copies except for the Franchise Agreement, correspondence, and documents needed for legal compliance. City Wide is entitled to immediate equitable remedies, including restraining orders and injunctive relief, to protect its confidential information, as monetary damages alone may not be sufficient compensation for a breach of confidentiality.
Franchisees are permitted to share Confidential Information with their employees only to the extent necessary for operating the Franchised Business. Furthermore, franchisees must ensure that all employees with access to City Wide's Confidential Information and Software execute a confidentiality agreement in a form acceptable to City Wide. This requirement underscores the importance of safeguarding City Wide’s proprietary information and trade secrets, ensuring that both the franchisee and their employees are legally bound to maintain confidentiality.