As an Exit franchisee, under what conditions may I copy any of Exit's confidential information?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
EXIT Realty Upper Midwest does not own or grant you the right to use any item governed by a patent but does permit you to use Proprietary Information in the Training Manuals, and copyrighted material owned by EXIT while you are a Franchisee. See ITEM 11 of this Disclosure Document. Although EXIT does not own federally determined rights in copyright materials and has not filed an Application for Copyright Registration for the Training Manuals, the information in the Training Manuals is proprietary, and EXIT claims a copyright to the entire Training Manuals and in various advertising and sales promotion materials used in connection with the EXIT System. You may not copy any of EXIT's confidential information or give it to a third party, except as EXIT authorizes. You must also promptly tell us when you learn about unauthorized use of this Proprietary Information. EXIT Realty Upper Midwest is not obligated to take any action but will respond to this information as we think appropriate. EXIT has the right to control any litigation involving Proprietary Information. EXIT or EXIT Realty Upper Midwest will defend you for claims by a third party concerning your use of this Proprietary Information.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD page 27)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, as a franchisee, you are generally prohibited from copying Exit's confidential information or providing it to third parties unless specifically authorized by Exit. This restriction is in place to protect Exit's proprietary information and maintain the integrity of the Exit system. The FDD specifies that the information in the Training Manuals is proprietary, and Exit claims a copyright to the entire Training Manuals and in various advertising and sales promotion materials used in connection with the Exit System.
The FDD emphasizes the importance of protecting Exit's confidential information, including Trade Secrets, recruiting techniques, operational procedures, and other methods developed by Exit. Franchisees must hold all Trade Secrets in the strictest confidence and protect them against unauthorized disclosure. This obligation extends both during the term of the Franchise Agreement and after its termination, expiration, or non-renewal.
There are limited exceptions where information is not considered confidential. These exceptions include information that becomes publicly available through no fault of the franchisee, was already in the franchisee's possession without restrictions prior to receiving it from Exit, was rightfully disclosed to the franchisee by a third party without restrictions, or is required to be disclosed by court order. However, the franchisee bears the burden of documenting these exceptions.
Overall, the FDD makes it clear that franchisees must exercise extreme caution in handling Exit's confidential information and should only copy or disclose it if explicitly authorized by Exit. Unauthorized use or disclosure of confidential information could lead to legal consequences and potential termination of the Franchise Agreement.