What obligation does a City Wide prospect have regarding the use of Proprietary Information?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Proprietary Information/Confidential Treatment. During business dealings between the parties, certain confidential information of CITY WIDE will be disclosed to Prospect. Prospect or any of its employees, will not for any reason or purpose whatsoever, use for its personal benefit, or disclose, communicate or divulge to, or use for the direct or indirect benefit of any person, firm, association or corporation other than Prospect, any knowledge of confidential information which is proprietary to CITY WIDE ("Proprietary Information"). All Proprietary Information is and will remain the sole property of CITY WIDE and its assigns, and Prospect hereby assigns to CITY WIDE any rights it has or may acquire in such Proprietary Information. Prospect will have access to and become acquainted with various trade secrets and trade sources, consisting of patterns, operational systems and compilations of information, records, and specifications which are owned by CITY WIDE, and which are regularly used in the operation of a Franchised Business. Prospect will not disclose any of the previously mentioned trade secrets, directly or indirectly, or use them in any way, at any time, except as required business dealings between CITY WIDE and Prospect.
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- Injunctive Relief. Any breach of provisions of this Agreement will cause irreparable harm to CITY WIDE, and therefore, in the event of a breach or threatened breach of the provisions of this Confidentiality Agreement, CITY WIDE will be entitled to an injunction restraining Prospect from disclosing or appropriating in whole or in part, the Proprietary Information, or from rendering any services to any person, firm, corporation, association or other entity to whom such confidential information, in whole or in part, has been disclosed or is threatened to be disclosed. Nothing herein will be construed as prohibiting CITY WIDE from pursuing any other remedies available for such breach or threatened breach, including the recovery of damages.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, a prospective franchisee, referred to as "Prospect," is obligated to maintain the confidentiality of City Wide's proprietary information. During discussions between City Wide and the prospect, confidential information will be disclosed, and the prospect agrees not to use this information for personal benefit or disclose it to others. This includes employees of the prospect. All proprietary information remains the sole property of City Wide, and the prospect assigns any rights they may acquire in such information to City Wide. The prospect will have access to trade secrets, operational systems, and compilations of information, which they must not disclose or use except as required for business dealings with City Wide.
City Wide emphasizes the importance of protecting its proprietary information, as any breach of this agreement could cause irreparable harm. Therefore, City Wide is entitled to seek an injunction to prevent the prospect from disclosing or using the proprietary information. This legal remedy aims to restrain the prospect from sharing the information or providing services to any entity to whom the confidential information has been disclosed or is threatened to be disclosed. However, the ability to seek an injunction does not prevent City Wide from pursuing other available remedies, including monetary damages, for any breach or threatened breach of the confidentiality agreement.
This obligation is a standard practice in franchising, as franchisors like City Wide rely on their proprietary information to maintain a competitive advantage. Prospective franchisees must understand that this confidentiality extends beyond the initial discussions and remains in effect even if they do not ultimately become franchisees. By agreeing to these terms, the prospect acknowledges the value and importance of City Wide's confidential information and commits to protecting it from unauthorized use or disclosure.