What constitutes an unfair method of competition with Engel & Volkers regarding Confidential Information?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Recipient acknowledges and agrees that all Confidential Information they receive from Franchisor is confidential and proprietary information and trade secrets in which Franchisor has a proprietary interest. "Confidential Information" includes, by way of example, but not limitation, all business and operational secrets and all information received by Franchisee, either directly or indirectly, with respect to the ENGEL & VÖLKERS System, including that contained in the Integrated Product Suite provided pursuant to Section 7 of the Franchise Agreement, and from the know-how conveyed to Franchisee in the System Documentation. Recipient will not acquire any interest in the Confidential Information learned by Recipient other than the right for Recipient to utilize the same in connection with evaluating whether Recipient desires to directly or indirectly enter into a franchise relationship with Franchisor and the use or duplication of the Confidential Information in any other business or capacity will constitute an unfair method of competition with Franchisor or its affiliates and Franchisor's other franchisees.
Source: Item 23 — RECEIPTS (FDD pages 88–302)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, using or duplicating confidential information in any business or capacity other than evaluating whether to enter a franchise relationship with Engel & Volkers constitutes an unfair method of competition. This includes all business and operational secrets and all information received with respect to the Engel & Volkers system, including that contained in the Integrated Product Suite and from the know-how conveyed in the System Documentation.
The Confidentiality Agreement specifies that confidential information shall only be used for evaluating whether to directly or indirectly enter into a franchise relationship with Engel & Volkers. It cannot be used in any other business, manner, or capacity. Maintaining absolute confidentiality is required, and the information cannot be copied without authorization or disclosed to any third party without prior written consent from Engel & Volkers. The agreement also explicitly states that using confidential information with any generative, artificial intelligence tool or program is considered disclosure to a third party and a breach of the agreement.
This has significant implications for prospective franchisees. It restricts their ability to leverage information gained during the evaluation phase for any purpose other than assessing the franchise opportunity. The broad definition of "Confidential Information" means franchisees must be extremely careful about how they handle and protect any data or knowledge they receive from Engel & Volkers. The agreement also makes it clear that Engel & Volkers will suffer irreparable injury if a recipient discloses or misuses confidential information, and they consent to interim relief such as injunctions without requiring a bond.
These terms are typical in franchise agreements to protect the franchisor's proprietary information and maintain a competitive advantage. Prospective franchisees should carefully review the confidentiality agreement and understand the scope of restrictions before signing.