Does the definition of 'Confidential Information' for Engel & Volkers include the System Documentation provided to the franchisee?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
For avoidance of doubt, "Confidential Information" includes (without limitation) all information, knowledge, trade secrets or know-how utilized or embraced by the ENGEL & VÖLKERS System and/or imparted to Recipient by Franchisor or any of its affiliates which concerns Franchisor's systems of operation, programs, services, products, customers, clients, prospective customers or client, practices, materials, books, records, manuals, computer files, databases or software; all elements of the ENGEL & VÖLKERS System; all programs, products, services, equipment, technologies, policies, standards, requirements, criteria and procedures that now or in the future are a part of the ENGEL & VÖLKERS System; the System Documentation; all specifications, procedures, systems, techniques and activities employed by Franchisor in the offer and sale of services, programs, and/or products at or from a franchised ENGEL & VÖLKERS Residential Real Estate Brokerage; all of Franchisor's sources (or prospective sources) of supply and all information pertaining to same; Franchisor's specifications, and Franchisee's final plans, for the construction, build out, design, renovation, décor, equipment, signage, furniture, fixtures and trade dress elements of Franchisee's office; the identity of, and all information relating to, the computer systems and software utilized under the Franchise Agreement; all information pertaining to Franchisor's and Franchisee's advertising, marketing, promotion and merchandising campaigns, activities, materials, specifications and procedures; all customer lists, data and records generated and/or otherwise maintained by Franchisee's franchised ENGEL & VÖLKERS business; Franchisor's (and, if in the future Franchisor permits, Franchisee's) internet/web protocols, procedures and content (including electronic data, data files, user names and passwords); Franchisor's training and other instructional programs and materials; all elements of Franchisor's recommended staffing, staff training and staff certification policies and procedures; all communications between Franchisor and Franchisee; additions or improvements to, deletions from and modifications and variations of the components of the ENGEL & VÖLKERS System and the other systems and methods of operations which Franchisor employs now or in the future; research, development and test programs for services and operations; and, all other information, knowledge and know-how which either Franchisor or their respective affiliates, now or in the future, designate as confidential.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the definition of "Confidential Information" explicitly includes the System Documentation provided to the franchisee. This means that the System Documentation, which contains know-how conveyed to the franchisee, is considered confidential and proprietary information belonging to Engel & Volkers. Franchisees must treat this information with strict confidence and not disclose it to any third party.
Engel & Volkers franchisees are obligated to protect this Confidential Information during the term of the franchise agreement and even after its termination. They can only use the information for operating their Engel & Volkers Residential Real Estate Brokerage. The franchisee also agrees that use of Confidential Information in connection with any generative, artificial intelligence tool or program is considered disclosure of such Confidential Information to a third party and constitutes a breach of this Section.
This confidentiality extends to the franchisee's staff members and independent Sales Advisors, who must also adhere to these confidentiality obligations. Engel & Volkers requires franchisees to ensure that their personnel sign a Confidentiality Agreement and Covenant Not to Compete. Upon termination or expiration of the Franchise Agreement, the franchisee must return all Confidential Information, including any copies, to Engel & Volkers.
There are exceptions to this confidentiality requirement. Franchisees are not obligated to keep information confidential if it was already publicly available at the time of disclosure, becomes publicly available through no fault of their own, or if they can prove they possessed the information before receiving it from Engel & Volkers. This is a fairly standard practice in franchising, as franchisors need to protect their proprietary systems and methods while allowing franchisees to operate their businesses effectively.