Under what circumstances is a party permitted to disclose confidential information concerning the other party in the Dermani Medspa agreement?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
| the laws of the state of Georgia | on January 16, 2019. On March 25, 2022, |
BACKGROUND:
WHEREAS, dermani MEDSPA® Franchising LLC ( "Franchisor") has developed a distinctive set of specifications and operating procedures (collectively, the "System") for the operation of "dermani MEDSPA®" centers ( "Medpsas" or "Franchised Businesses").
WHEREAS, Franchisor and Developer have executed an Area Development Agreement ("Area Development Agreement") granting Developer the right to operate Franchised Businesses pursuant to individual Franchise Agreements;
WHEREAS, the Member, by virtue of his or her position with Developer, will gain access to certain of Franchisor's Confidential Information, as defined herein, and must therefore be bound by the same confidentiality and non-competition agreement that Developer is bound by.
IN CONSIDERATION of these premises, the conditions stated herein, and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties agree as follows:
- Confidential Information. Member will not, during the term of the Area Development Agreement or thereafter, communicate, divulge or use for any purpose other than the operation of the Franchised Businesses, any confidential information, knowledge, trade secrets or know-how which may be communicated to Member or which Member may learn by virtue of Member's relationship with Developer. All information, knowledge and know-how relating to Franchisor, its business plans, Franchised Businesses, or the System ("Confidential Information") is deemed confidential, except for information that Member can demonstrate came to Member's attention by lawful means prior to disclosure to Member or which, at the time of the disclosure to Member, had become a part of the public domain.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa FDD, a member can disclose confidential information if they can demonstrate that the information came to their attention by lawful means before it was disclosed to them, or if the information had already become part of the public domain at the time of disclosure. Additionally, there may be certain limited circumstances where applicable law allows for the disclosure of certain trade secrets, as specified in the Dermani Medspa manuals.
For a Dermani Medspa franchisee, this means that information considered confidential remains protected unless it falls under specific exceptions. Franchisees must be able to prove that they legally obtained the information before receiving it from Dermani Medspa or that the information was already publicly available. The reference to 'certain, limited circumstances where applicable law allows for the disclosure of certain trade secrets' suggests that legal requirements, such as court orders or compliance with specific regulations, could override the confidentiality agreement.
Dermani Medspa also states that confidential information does not include information that the franchisee can demonstrate lawfully came to their attention before Dermani Medspa provided it, or if it was already generally known in the healthcare management or medical spa industries through publication or communication by others without violating any obligations to Dermani Medspa. If Dermani Medspa includes any matter in Confidential Information, anyone who claims that it is not Confidential Information must prove that one of the exclusions is fulfilled.
This clause protects Dermani Medspa's proprietary information while also providing franchisees with a way to use information they already legitimately possess or that is publicly available. However, the burden of proof lies with the franchisee to demonstrate that the information falls under these exceptions. Franchisees should be aware of these conditions and maintain records to support any claims that certain information is not confidential.