What standard of care must a Crowne Plaza licensee use to protect Confidential Information?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee shall use commercially reasonable care and discretion to avoid unauthorized use, disclosure, publication, or dissemination of Confidential Information (which shall be no less than the standard of care used by Licensee to protect its Confidential Information of a similar nature). For Confidential Information that does not constitute a "trade secret" under applicable law, these confidentiality obligations will expire three (3) years after the termination or expiration of the License. For Confidential Information that constitutes a "trade secret" under applicable law, these confidentiality obligations will continue until such information ceases to constitute a "trade secret" under such applicable law. Licensee will be responsible for any breach of this Section by its Agents, Affiliates and any third party to whom it or they disclose Confidential Information in accordance with this Section ("Recipients").
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza FDD, a licensee must use commercially reasonable care and discretion to avoid unauthorized use, disclosure, publication, or dissemination of Confidential Information. This standard must be no less than the standard of care used by the licensee to protect its own Confidential Information of a similar nature. This means a Crowne Plaza licensee is expected to protect IHG's confidential information with at least the same level of diligence that they would protect their own sensitive business data.
The FDD specifies that these confidentiality obligations extend for three years after the termination or expiration of the license agreement for Confidential Information that does not constitute a "trade secret" under applicable law. However, for Confidential Information that qualifies as a trade secret, the confidentiality obligations continue until the information no longer meets the legal definition of a trade secret. The licensee is held responsible for any breaches of confidentiality by its agents, affiliates, and any third parties to whom they disclose Confidential Information.
This obligation extends to ensuring adequate security and backup procedures to prevent unauthorized access, use, or inadvertent loss of data. The licensee is responsible for determining appropriate security measures, which must be no less than the standard of care in the industry. Additionally, the licensee must comply with any additional security and data protection practice requirements that IHG provides in writing, which may be updated periodically. Licensees are given 30 days to comply with any Security Practices Update issued by IHG.
These measures ensure that sensitive business data and trade secrets belonging to IHG are protected during and after the franchise agreement. Prospective franchisees should carefully review the definition of Confidential Information and the Security Practices to understand the full scope of their obligations and potential liabilities.