Is the disclosure of Confidential Information by Engel & Volkers conditional?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor is disclosing the Confidential Information to Recipient solely on the condition that Recipient agree, and Recipient does hereby agree, that any Confidential Information received from Franchisor (a) shall only be used for purposes of evaluating whether Recipient desires to directly or indirectly enter into a franchise relationship with Franchisor, (b) will not be used in any other business, manner or capacity, (c) will have its absolute confidentiality maintained, (d) will not be copied without authorization, and (e) will not be disclosed to any third party without the prior written consent of Franchisor.
Recipient 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 Agreement.
Recipient agrees to use reasonable care to prevent the disclosure of the Confidential Information to any third party, and further agrees to limit the dissemination of the Confidential Information within its own organization to individuals whose duties justify the need to know such information, and then only provided that there is a clear understanding by such individuals of their obligation to maintain the confidential status of the Confidential Information and to restrict its use solely to the purposes specified herein.
Each other person receiving the Confidential Information must also sign a copy of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 88–302)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the disclosure of Confidential Information is conditional. Engel & Volkers is disclosing Confidential Information to the recipient only if the recipient agrees to specific conditions. These conditions include using the information solely to evaluate a potential franchise relationship with Engel & Volkers, not using it in any other business, maintaining absolute confidentiality, not copying it without permission, and not disclosing it to any third party without Engel & Volkers' prior written consent.
Furthermore, the agreement specifies that using Confidential Information with any generative, artificial intelligence tool or program is considered a breach of the agreement, as it constitutes disclosure to a third party. The recipient must use reasonable care to prevent disclosure and limit dissemination within their organization to individuals with a justified need to know, ensuring those individuals understand their confidentiality obligations. Each person receiving the Confidential Information must also sign a copy of the agreement.
These conditions highlight the importance Engel & Volkers places on protecting its proprietary information and trade secrets. A prospective franchisee must carefully consider these obligations and ensure they can comply with them. Failure to do so could result in legal action and significant damages, as Engel & Volkers emphasizes that it would suffer irreparable injury if the Confidential Information is disclosed or misused. The confidentiality obligations extend beyond the evaluation phase, surviving even if the recipient decides not to enter into a franchise relationship with Engel & Volkers.
This type of confidentiality agreement is standard practice in franchising to protect the franchisor's business model and trade secrets. Prospective franchisees should be prepared to sign such an agreement and understand its implications before receiving sensitive business information.