Does the Degree Wellness Non-Disclosure Agreement impose any confidentiality obligations that survive the termination or expiration of the Franchise Agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
that your relationship with us does not vest in you any interest in the Confidential Information, other than the right to use it solely in the development and operation of the Franchise during the Term of this Agreement, and that the use or duplication of the Confidential Information in any other business or for any other purpose would constitute an unfair method of competition or otherwise result in irreparable damage to us.
- 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
under no duty or obligation to you to enforce any such Agreements for your or our benefit. Your duties and obligations with respect to Confidential Information shall survive the Transfer, termination or expiration of this Agreement.
9.3 Non-Competition Agreement and Other Restrictive Covenants.
- a. Non-Competition. You agree that we would be unable to protect the Confidential Information against unauthorized use or disclosure, and would be unable to encourage a free exchange of ideas and information among Degree Wellness franchises, if franchise owners of Degree Wellness franchises were permitted to hold interests in any competitive businesses (as described below).
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 Agreement includes confidentiality obligations that extend beyond the termination or expiration of the Franchise Agreement. Franchisees must maintain the absolute confidentiality of the Confidential Information both during and after the term of the agreement and are prohibited from disclosing it to any third party. This obligation survives the transfer, termination, or expiration of the agreement. Upon termination or expiration of the franchise, franchisees must immediately cease using any Confidential Information.
This means that even after a Degree Wellness franchise closes or is transferred, the former franchisee remains legally bound to protect the brand's Confidential Information. This includes refraining from using or disclosing any information related to the services, products, sales performance, marketing programs, operational methods, or copyrighted materials associated with Degree Wellness. The franchisee must also return all copies of the Operations Manual and any other confidential materials provided by Degree Wellness.
These continuing obligations are typical in franchising to protect the franchisor's proprietary information and trade secrets. The restrictions prevent former franchisees from using their knowledge of the Degree Wellness system to unfairly compete or benefit a competitor. Prospective franchisees should carefully review the definition of "Confidential Information" in the FDD and understand the scope of these restrictions before signing the Franchise Agreement. They should also be aware that failure to comply with these confidentiality obligations could result in legal action by Degree Wellness.