Can a Craters & Freighters franchisee use the franchisor's Confidential Information for their own purposes?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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 Franchise Disclosure Document, franchisees are explicitly prohibited from using the franchisor's Confidential Information or Trade Secrets for their own purposes. This restriction is in place to protect Craters & Freighters's proprietary business methods and maintain a consistent brand standard across all franchise locations. Confidential Information includes knowledge, know-how, standards, methods, procedures, customer records, supplier information, databases, marketing materials, and any data Craters & Freighters designates as confidential. Trade Secrets encompass formulas, patterns, compilations, programs, devices, methods, training techniques, or processes related to the Craters & Freighters system that provide economic value and are kept secret.
The franchise agreement mandates that franchisees must keep all Confidential Information and Trade Secrets strictly confidential. They cannot use this information for their own benefit or share it with any outside parties, except when reasonably necessary to operate the franchised business. Franchisees are also required to implement procedures to prevent unauthorized use or disclosure of this information. This obligation extends not only to the franchisee but also to the franchisee's owners.
This confidentiality obligation remains in effect during the entire term of the franchise agreement and continues indefinitely even after the agreement expires, terminates, or is not renewed. This perpetual restriction underscores the importance Craters & Freighters places on protecting its proprietary information and maintaining its competitive advantage. Prospective franchisees should carefully consider these obligations and ensure they have the resources and commitment to comply with these requirements, as violations could lead to legal and financial repercussions.