Does the obligation to maintain confidentiality of Crawlspace Medic's Confidential Information extend beyond the termination or expiration of the Franchise Agreement?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
icenses granted hereunder to Developer shall immediately terminate and Developer shall (i) immediately cease all development operations pursuant to this Agreement; and (ii) comply with the non-disclosure and non-competition covenants contained in Article 8.
8 NON-DISCLOSURE AND NON-COMPETITION COVENANTS.
8.1 Confidential Information. Developer acknowledges and accepts that during the term of this Agreement, Developer will have access to Franchisor's trade secrets, including, but not limited to, methods, processes, customer lists, vendor partnerships and/or relationships, sales and technical information, financial information, costs, product prices and names, software tools and applications, website and/or email design, products, services, equipment, technologies and procedures relating to the operation of a Crawlspace Medic outlet; the Manual; methods of advertising and promotion; instructional materials; any other information which Franchisor may or may not specifically designate as "confidential" or "proprietary"; and the components of the System, whether or not such information is protected or protectable by patent, copyright, trade secret or other proprietary rights (collectively referred to herein as the "Confidential Information"). Developer shall not, during the term of this Agreement and thereafter,
communicate or divulge to, or use for the benefit of, any other person or entity, and, following the expiration or termination of this Agreement, shall not use for Developer's own benefit, any Confidential Information that may be communicated to Developer or of which Developer may be apprised in connection with the development of Crawlspace Medic outlets under the terms of this Agreement. Developer shall not at any time copy, duplicate, record or otherwise reproduce any Confidential Information, in whole or in part, or otherwise make the same available to any person, without Franchisor's prior written consent. The covenant in this Section 8.1 shall survive the expiration, termination or transfer of this Agreement or any interest herein and shall be perpetually binding upon Developer.
- 8.2 Protection of Information.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD page 32)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, the obligation to maintain the confidentiality of Crawlspace Medic's confidential information extends beyond the termination or expiration of the Franchise Agreement. Specifically, the agreement states that the Developer, who gains access to confidential information, shall not communicate, divulge, or use this information for the benefit of any other person or entity during the term of the agreement and thereafter.
Following the expiration or termination of the agreement, the Developer is prohibited from using any confidential information for their own benefit. This includes methods, processes, customer lists, vendor partnerships, sales and technical information, financial data, costs, product prices, software tools, website design, products, services, equipment, technologies, procedures, the Manual, advertising methods, instructional materials, and components of the Crawlspace Medic system.
The agreement explicitly states that the covenant regarding confidentiality survives the expiration, termination, or transfer of the agreement and is perpetually binding upon the Developer. Furthermore, the Developer must take all necessary steps, at their own expense, to protect the confidential information and must immediately notify Crawlspace Medic if any confidential information is divulged in violation of the agreement.
This perpetual obligation is a significant consideration for prospective Crawlspace Medic developers, as it restricts their ability to use any knowledge gained during their time with Crawlspace Medic, even after they leave the system. This is designed to protect Crawlspace Medic's competitive advantage and proprietary information.