What is the nature of the Confidential Information of Closet Storage Concepts?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- The Franchisor, as the result of the expenditure of time, skill, effort and resources, has developed and owns a distinctive format and system (the "System") relating to the establishment and operation of Closet & Storage Concepts businesses. The Franchisor possesses certain proprietary and confidential information relating to the operation of the System, which includes proprietary trade secrets, specifications, security protocols, computer hardware and systems, technology and equipment used, methods of business practices and management, research and development, training processes, operational manuals, presentation materials, vendor agreements, supplier lists, vendor lists, marketing and merchandising strategies, plans for new product or service offerings, and knowledge of, and experience in, the operation of the Franchised Business (the "Confidential Information"). Confidential Information shall also expressly include all customer and franchisee personal and business information that I obtain or have access to during my employment, as well as the confidential information of any other third parties to whom the Franchisor owes a duty of confidentiality. Further, any and all information, knowledge, know-how, and techniques which the Franchisor specifically designates as confidential shall be deemed to be Confidential Information for purposes of this Agreement.
-
- In consideration for my access to the Confidential Information and other good and valuable consideration, the receipt and sufficiency of which is acknowledged, I hereby acknowledge and agree to the terms of this Confidentiality and Non-Disclosure and Non-Competition Agreement (the "Agreement").
-
- I will not acquire any interest in the Confidential Information, other than the right to utilize it in providing assistance for Franchisee during the term of the Franchise Agreement and the use or duplication of the Confidential Information for any use outside the System would constitute an unfair method of competition. I covenant that I will not forward or provide the Confidential Information to any third party, nor store it on any personal or third-party electronic device, disk, drive, or otherwise, unless expressly authorized to do so by the Franchisor.
-
- Any work performed by me during my spouse's affiliation with Franchisee in relation to Closet & Storage Concepts or the Franchise Agreement and any derivative works created by me using the Confidential Information or any proprietary information of the Franchisor are considered "works made for hire" and I will have no ownership interest in the items created.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, the franchisor possesses proprietary and confidential information regarding the Closet Storage Concepts system. This information is crucial for establishing and operating a Closet Storage Concepts business. It encompasses a wide array of elements, including trade secrets, specifications, security protocols, computer systems, technology, business practices, management methods, research and development, training processes, operational manuals, presentation materials, vendor agreements, supplier and vendor lists, marketing and merchandising strategies, plans for new product or service offerings, and knowledge and experience in operating the franchised business.
This Confidential Information extends to customer and franchisee personal and business data obtained during employment, as well as confidential information belonging to third parties to whom Closet Storage Concepts owes a duty of confidentiality. Any information specifically designated as confidential by Closet Storage Concepts also falls under this umbrella. Franchisees are granted access to this information for the purpose of supporting the franchise during the term of the Franchise Agreement, but any use or duplication of the Confidential Information outside the Closet Storage Concepts system is considered unfair competition.
Franchisees are prohibited from forwarding or providing the Confidential Information to any third party or storing it on personal or third-party electronic devices without express authorization from Closet Storage Concepts. All data pertaining to the franchised business and collected by the franchisee in connection with the Closet Storage Concepts system, including customer data, is owned exclusively by Closet Storage Concepts. Closet Storage Concepts has the right to use this data in any manner it deems appropriate without compensating the franchisee, including communicating directly with customers and providing updates and special offers. Upon termination of the Franchise Agreement, the franchisee loses all rights to access or use this information.
Employees and even spouses of franchisees are required to sign confidentiality agreements, acknowledging the proprietary nature of the information and agreeing to hold it in strict confidence. Franchisees must ensure their employees are aware of their confidentiality obligations and may be held liable for any breaches. This underscores the importance Closet Storage Concepts places on protecting its proprietary information and maintaining a competitive edge in the market.