What happens to the non-disclosure covenants outlined in Section 9 after the termination or expiration of a Degree Wellness franchise?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that on termination or expiration of the Franchise you will immediately cease to use any of the Confidential Information and agree not to use it in any business or for any other purpose.
You further agree that all non-disclosure and related covenants set forth in Section 9 above shall survive such termination or expiration and you will immediately return to us all copies of the Operations Manual and any written Confidential Information or other confidential materials that we have loaned or provided to you.
9.2 Non-Disclosure Agreement.
- b. You acknowledge and agree that the Confidential Information belongs to us, may contain trade secrets belonging to us, and is disclosed to you or authorized for your use solely on the condition that you agree, and you therefore do agree, that you (1) will not use, directly or indirectly, the Confidential Information in any business or capacity or for any purpose other than as needed in the development and operation of the Franchise during the Term of this Agreement; (2) will maintain the absolute confidentiality of the Confidential Information during and after the Term of this Agreement and not directly or indirectly publish or otherwise disclose it to any third party; (3) will not make unauthorized copies of any portion of the Confidential Information disclosed in written form or another form or media that may be copied or duplicated; and (4) will adopt and implement all reasonable procedures, including any that we may prescribe from time to time, to prevent unauthorized use or disclosure of the Confidential Information, including without limitation restrictions on disclosure to or by your employees, and the use of non-disclosure, non-solicitation, non-disparagement and non-competition agreements we may prescribe or approve for your shareholders, partners, members, officers, directors, employees, independent contractors, or agents who may have access to the Confidential Information. You acknowledge and agree that we are
16.6 Continuing Obligations. All obligations of this Agreement (whether yours or ours) that expressly or by their nature survive the expiration or termination of this Agreement will continue in full force and effect after and notwithstanding its expiration or termination until they are satisfied in full or by their nature expire. Without limiting the foregoing, you acknowledge and agree that your covenants in Article 9 above survive the termination or expiration of this Agreement to the extent set forth in such Article 9.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the non-disclosure covenants outlined in Section 9 survive the termination or expiration of the franchise agreement. Specifically, the franchisee must immediately cease using any confidential information and not use it in any business or for any other purpose. The franchisee must also return all copies of the Operations Manual and any written confidential information or other confidential materials that Degree Wellness provided.
Section 9.2(b)(2) states that the franchisee must maintain the absolute confidentiality of the Confidential Information during and after the Term of this Agreement and not directly or indirectly publish or otherwise disclose it to any third party. Section 16.6 reinforces this by stating that the franchisee's covenants in Article 9 survive the termination or expiration of the Agreement to the extent set forth in such Article 9.
These stipulations are typical in franchising to protect the franchisor's proprietary information and trade secrets. For a prospective Degree Wellness franchisee, this means that even after the franchise agreement ends, they are legally obligated to keep all confidential information secret and cannot use it for their own benefit or disclose it to others. Failure to comply with these covenants could result in legal action from Degree Wellness.