What are the confidentiality obligations of a Craters & Freighters franchisee regarding the Franchisor's Confidential Information or Trade Secrets?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.1 Confidential Information and Trade Secrets.
In connection with the operation of the Franchised Business, Franchisee will from time to time become acquainted with, work with, and even generate certain information, procedures, techniques, data, and materials that are and, by this Agreement, will become proprietary to Franchisor. "Confidential Information" means certain confidential information relating to the operation of a Craters & Freighters Franchised Business which includes, but is not limited to, all knowledge, know-how, standards, methods and procedures related to the establishment and operation of the System and includes all records pertaining to customers, approved suppliers, and other service providers of, and/or related in any way to, Franchisee's Franchised Business including, without limitation, all databases (whether in print, electronic or other form), all names, addresses, phone numbers, e-mail addresses, customer purchase records, manuals, promotional and marketing materials, marketing strategies and any other data which Franchisor designates as confidential. "Trade Secret(s)" means information, including any formula, pattern, compilation, program, device, method, training technique or process related to the System that both derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
- 7.2 Confidentiality Obligations.
Franchisee and Franchisee's owner(s) agree they: (i) will keep confidential any of Franchisor's Confidential Information or Trade Secrets, (ii) will not use such for its or their own purpose or supply or divulge same to any person, firm, association, or corporation except as reasonably necessary to operate the Franchised Business, (iii) will adopt and implement all reasonable procedures, including those that Franchisor prescribes to prevent unauthorized use or disclosure of any Confidential Information or Trade Secrets.
The confidentiality obligations set forth in this section will remain in full force and effect during the term of this Agreement and in perpetuity after its termination or expiration and non-renewal.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters FDD, franchisees have specific and ongoing confidentiality obligations regarding the franchisor's confidential information and trade secrets. Confidential Information includes knowledge, know-how, standards, methods, procedures related to the System, records pertaining to customers, approved suppliers, service providers, databases, names, addresses, phone numbers, email addresses, customer purchase records, manuals, promotional and marketing materials, marketing strategies and any other data which Craters & Freighters designates as confidential. Trade Secrets include information like formulas, patterns, compilations, programs, devices, methods, training techniques, or processes related to the System that derive independent economic value from not being generally known and are subject to reasonable efforts to maintain secrecy.
Craters & Freighters franchisees and their owners must keep confidential any of the Franchisor's Confidential Information or Trade Secrets. They are prohibited from using such information for their own purposes or from supplying or divulging it to any third party, unless it is reasonably necessary to operate the Franchised Business. Franchisees must also adopt and implement reasonable procedures, including those prescribed by Craters & Freighters, to prevent unauthorized use or disclosure of any Confidential Information or Trade Secrets.
These confidentiality obligations remain in full effect during the term of the Franchise Agreement. Critically, these obligations extend indefinitely even after the termination, expiration, or non-renewal of the agreement. This means that even after a franchisee leaves the Craters & Freighters system, they are still legally bound to protect the franchisor's confidential information and trade secrets.