factual

What right does a Craters & Freighters franchisee have regarding Confidential Information or Trade Secrets?

Craters_Freighters Franchise · 2025 FDD

Answer from 2025 FDD Document

. Franchisee will devote Franchisee's best efforts to develop, operate, and grow the Franchised Business throughout the duration of this Agreement.

7. CONFIDENTIAL INFORMATION AND TRADE SECRETS.

  • 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. Upon the termination or expiration and non-renewal of this Agreement, all items, records, documentation, and recordings incorporating any Confidential Information or Trade Secrets will be immediately turned over by Franchisee, at Franchisee's sole expense, to Franchisor or to Franchisor's authorized representative. Franchisee must ensure and require that all of Franchisee's owners, officers, directors, shareholders, and partners (each a "Restricted Person" and, collectively, "Restricted Persons") execute a prescribed form of confidentiality and non-competition agreement that will be in substantially the same form attached to this Agreement as Attachment F ("Confidentiality and Non-Competition Agreement"). Franchisee must obtain a signed copy of the Confidentiality and Non-Competition Agreement from every such Restricted Person prior to, or at the same time of, that Restricted Person undertaking its role with Franchisee. Franchisee's spouse or significant other will also be bound by the same requirement and will sign the same Confidentiality and Non-Competition Agreement. Franchisee must provide Franchisor with a copy of each signed Confidentiality and Non-Competition Agreement within ten (10) days of executing such Confidentiality and Non-Competition Agreement.
  • 7.3 No Interest.

Source: Item 22 — CONTRACTS (FDD pages 49–50)

What This Means (2025 FDD)

According to the 2025 Craters & Freighters Franchise Disclosure Document, franchisees gain access to confidential information and trade secrets vital for running their franchised business. This includes knowledge, know-how, standards, methods, procedures, customer records, supplier details, databases, marketing materials, and strategies designated as confidential by Craters & Freighters. Trade secrets encompass information like formulas, patterns, methods, and training techniques that provide economic value and are kept secret. Franchisees are obligated to maintain the confidentiality of this information, using it only as necessary for business operations and implementing measures to prevent unauthorized disclosure. These confidentiality obligations extend both during the term of the Franchise Agreement and indefinitely after its termination or expiration.

Craters & Freighters requires franchisees to protect its brand by keeping confidential any of the franchisor's confidential information or trade secrets. Franchisees must not use confidential information for their own purposes or share it with others, except when reasonably necessary to operate the franchised business. They also need to implement procedures to prevent unauthorized use or disclosure of confidential information.

Moreover, Craters & Freighters franchisees must disclose any improvements, inventions, or discoveries related to the business to the franchisor, which then automatically owns these improvements without compensating the franchisee. Franchisees must also assist Craters & Freighters in obtaining intellectual property protection for these improvements. These obligations continue even after the termination or expiration of the franchise agreement. This ensures that Craters & Freighters maintains control over its proprietary information and any advancements made within the franchise system.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.