What happens if the Franchisee breaches the confidentiality clause with Delta Hotels By Marriott?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
whole or in part, any documentation, software or other confidential information, knowledge, or know-how associated with the Services provided under this Agreement which may be communicated or provided to Franchisee, or of which Franchisee may be apprised, by virtue of Franchisee's operation under this Agreement, or otherwise make the same available to any unauthorized person. Franchisee shall divulge such information only to such of Franchisee's employees or agents as must have access to it in order to operate the Hotel; all other persons shall be deemed "unauthorized" for purposes of this Agreement. All such information, including without limitation, aggregated, anonymized market data and recommendations by Franchisor regarding rates, pricing, inventory, room allocations and rate allocations, is confidential and provided by Franchisor to Franchisee solely for the purposes of operating the Hotel, and Franchisee expressly acknowledges that such information shall not be used or considered in any respect by the Franchisee in reaching decisions for any other hotels owned, operated or franchised by the Franchisee. Franchisee further acknowledges that it will not divulge to Franchisor any confidential information, including business strategies or pricing, about non-Marriott properties that Franchisee owns, operates, or franchises. The information that is the subject of this Section 2 shall be deemed "Confidential Information" for purposes of the Franchise Agreement. The obligations of Franchisee under this Section 2 shall survive the termination of this Agreement.
Source: Item 7 — Franchisor reserves the right to challenge the applicability of any law that declares provisions in the Agreement void or unenforceable. (FDD pages 288–363)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Delta Hotels By Marriott requires franchisees to maintain the confidentiality of certain information. The franchisee cannot disclose documentation, software, confidential information, knowledge, or know-how associated with the services provided under the agreement to any unauthorized person. The franchisee can only share such information with employees or agents who need access to it to operate the hotel. All other persons are considered unauthorized. This includes aggregated, anonymized market data and recommendations from Delta Hotels By Marriott regarding rates, pricing, inventory, room allocations, and rate allocations. This information is provided solely for operating the hotel and cannot be used for other hotels owned, operated, or franchised by the franchisee. The franchisee also agrees not to disclose confidential information about non-Marriott properties to Delta Hotels By Marriott. This obligation survives the termination of the agreement.
According to the FDD, the consequences of breaching the confidentiality clause are not explicitly detailed. However, the document states that the information covered by the confidentiality obligations is deemed "Confidential Information" for the purposes of the Franchise Agreement. This implies that a breach of confidentiality would be treated as a violation of the Franchise Agreement itself.
In general franchise agreements, a breach can lead to various penalties, including monetary damages, injunctive relief (a court order to stop the behavior), and even termination of the franchise agreement. Because the FDD does not specify the penalties, it is important for a prospective franchisee to seek clarification from Delta Hotels By Marriott regarding the specific repercussions of violating the confidentiality clause. Understanding these potential consequences is crucial for assessing the risks associated with the franchise and ensuring compliance with the agreement.