What condition is placed on the disclosure of Closet Storage Concepts trade secrets?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
The Confidential Information is proprietary, involves trade secrets of the Franchisor, and is disclosed to me solely on the condition that I agree, and I do hereby agree, that I shall hold in strict confidence all Confidential Information.
Unless the Franchisor otherwise agrees in writing, I will disclose and/or use the Confidential Information only in connection with my duties as an employee of Franchisee, and will continue not to disclose or use any such information even after I cease to be employed by Franchisee, unless I can demonstrate that such information has become generally known to the public or easily accessible other than by the breach of an obligation of Franchisee under the Franchise Agreement, a breach of the employees or associates of Franchisee, or a breach of my own duties or the duties hereunder.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, the disclosure of the franchisor's trade secrets and confidential information is strictly conditional. The franchisee acknowledges that this information is proprietary and involves trade secrets, and it is disclosed solely on the condition that the franchisee agrees to hold all Confidential Information in strict confidence. This obligation extends beyond the term of the franchise agreement unless the franchisee can demonstrate the information has become publicly known through means other than a breach of the agreement.
This condition means that a Closet Storage Concepts franchisee must exercise extreme caution in handling and protecting the franchisor's confidential information. This includes not only the obvious things like the operations manual and training materials, but also extends to customer data, software specifics, and even knowledge of the operating results of other franchisees. The franchisee is responsible for ensuring that their employees also understand and adhere to these confidentiality obligations, and they can be held liable for any breaches by their staff.
Furthermore, spouses of franchisees must sign a Confidentiality, Non-Disclosure, and Non-Competition Agreement, reinforcing the importance Closet Storage Concepts places on safeguarding its trade secrets. The franchisee is also required to enforce these confidentiality agreements and notify the franchisor of any suspected breaches. This comprehensive approach ensures that the Closet Storage Concepts system and its proprietary information remain protected, maintaining a competitive advantage for both the franchisor and its franchisees.