Can a Degree Wellness franchisee use the Confidential Information in any business other than their franchise?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
The Confidential Information is proprietary, and, except to the extent that it is or becomes generally known in the industry or trade, is our trade secret, and is disclosed to you solely for your use in the operation of your franchise during the term of the franchise. You (1) must not use, directly or indirectly, the Confidential Information in any other business or capacity or for any purpose other than as needed in the development or operation of your franchise during the term of the franchise; (2) must maintain the confidentiality of the Confidential Information during and after the term of the franchise and not directly or indirectly publish or otherwise disclose it to any third party; (3) must not make unauthorized copies of any portion of the Confidential Information disclosed in written form or another form or media; and (4) must adopt and implement all reasonable procedures, including any that we may prescribe periodically, to prevent the unauthorized use or disclosure of any of the Confidential Information, including restrictions on disclosure to your employees and the use of nondisclosure clauses in employment agreements with your employees.
Source: Item 14 — Patents, Copyrights, and Proprietary Information (FDD pages 47–48)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees are explicitly restricted from using the Confidential Information provided by Degree Wellness in any business other than their franchised location. The Confidential Information, which includes methods, techniques, procedures, systems, knowledge, and experience related to the operation of Degree Wellness franchises, is to be used solely for the development and operation of the franchise during the term of the agreement. This restriction extends to various aspects of the business, such as services and products offered, sources of products, advertising programs, and operational methods.
This means a Degree Wellness franchisee cannot leverage the proprietary information gained from the franchise to start or operate a competing business or any other venture outside of their specific Degree Wellness franchise. The franchisee also cannot share or disclose this information to third parties, even after the franchise term ends. This is a standard practice in franchising to protect the franchisor's intellectual property and maintain a competitive advantage.
Furthermore, Degree Wellness franchisees are obligated to maintain the confidentiality of the Confidential Information and implement procedures to prevent unauthorized use or disclosure, including imposing restrictions on their employees through non-disclosure agreements. This ensures that the franchisor's trade secrets and operational methods remain protected within the Degree Wellness system. Unauthorized copying of the Confidential Information is also prohibited.
These stipulations are typical in franchise agreements to safeguard the franchisor's business model and proprietary information. Prospective Degree Wellness franchisees should carefully consider these restrictions and ensure they understand the limitations on using the Confidential Information outside the scope of their franchise agreement.