What happens if a City Wide franchisee violates the proprietary information clause?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
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. Marketing Fund
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, if a franchisee violates the proprietary information clause, City Wide is entitled to immediate equitable remedies. These remedies include restraining orders and injunctive relief to protect City Wide's confidential information. The document specifies that monetary damages alone may not be sufficient to compensate City Wide for a breach of the confidentiality terms outlined in Sections 5, 8, and 9 of the Franchise Agreement.
The Franchise Agreement emphasizes the importance of maintaining the confidentiality of trade secrets and proprietary information, both during and after the term of the franchise. Franchisees must ensure their employees who have access to confidential information also sign a confidentiality agreement. Failure to adhere to the mandatory specifications and standards in City Wide's Operating Manual, which contains proprietary information, constitutes a material breach of the Franchise Agreement.
If a franchisee fails to cure a breach of the agreement, City Wide has the right to enter the franchisee's business premises and take control of operations. During this time, the franchisee is responsible for paying City Wide a service fee of at least $300 per day, in addition to covering all travel, room, board, and other related expenses incurred by City Wide's representative. Furthermore, if the Franchise Agreement is terminated due to an uncured breach by the franchisee, the franchisee will forfeit any rights to Royalty Rebates they might have otherwise been entitled to.