Does the confidentiality obligation for an Engel & Volkers franchisee continue after the termination or expiration of the Franchise Agreement?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
15.2 Confidentiality After Termination or Expiration of Agreement: The foregoing confidentiality obligations will continue after termination or expiration of this Agreement.
15.3 Injunctive Relief: Franchisee acknowledges and agrees that Franchisor will suffer irreparable injury not capable of precise measurement in monetary damages if Franchisee discloses or misuses any Confidential Information. Accordingly, in the event of a breach of Section 15 by Franchisee, Franchisee consents to entry of interim relief, including, without limitation, the entry of a temporary restraining order, preliminary injunction, permanent injunction, writ of attachment, appointment of a receiver, and any other equitable relief which the court deems necessary in order to prevent irreparable injury, all without the requirement that bond be posted. Franchisee agrees that the award of equitable remedies to Franchisor in the event of such breach is reasonable and necessary for the protection of the business and goodwill of Franchisor.
15.4 No Duplication. Except as authorized in this Agreement, Franchisee agrees never to copy, duplicate, record or otherwise reproduce any of the Confidential Information, in whole or in part; otherwise share it with any other third party individual or entity; or, otherwise make it available to any third party by any other means whatsoever. Upon the expiration or termination of this Agreement, Franchisee agrees to return to Franchisor such Confidential Information as Franchisor requests (including training materials and other instructional content; financial and non-financial books and records; the System Documentation; and, computer databases, software and manuals) which is then in Franchisee's possession or, upon Franchisor's request, destroy all or certain such Confidential Information and certify such destruction to Franchisor.
15.5 Execution of Separate Agreement. Each shareholder, partner, member, officer, director, brokerage manager and office manager of Franchisee shall execute Franchisor's form of Confidentiality Agreement and Covenant Not to Compete attached as Appendix 3.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the confidentiality obligations of a franchisee extend beyond the termination or expiration of the Franchise Agreement. Specifically, the FDD states that the confidentiality obligations outlined in Section 15 will remain in effect even after the agreement ends. This means that franchisees are legally bound to protect Engel & Volkers' confidential information, such as trade secrets, business strategies, and customer data, even after they are no longer operating under the Engel & Volkers brand.
Engel & Volkers emphasizes the importance of protecting its confidential information, as any unauthorized disclosure or misuse could cause irreparable harm to the company. To prevent such breaches, Engel & Volkers can seek injunctive relief, including temporary restraining orders, preliminary and permanent injunctions, and other equitable remedies, without needing to post a bond. Franchisees also agree not to copy, duplicate, or reproduce any confidential information, nor share it with third parties. Upon termination or expiration of the agreement, franchisees must return all confidential information to Engel & Volkers or destroy it and certify the destruction.
Furthermore, Engel & Volkers requires each shareholder, partner, member, officer, director, brokerage manager, and office manager of the franchisee to execute a Confidentiality Agreement and Covenant Not to Compete, reinforcing the commitment to maintaining confidentiality. This multi-layered approach ensures that all individuals with access to confidential information are aware of their obligations and the potential consequences of breaching them. This is a fairly standard practice in franchising, as franchisors need to protect their proprietary information to maintain a competitive advantage.