What is the Exit franchisee's obligation regarding the protection of Trade Secrets?

According to Exit's 2025 Franchise Disclosure Document, franchisees have specific obligations regarding the protection of trade secrets. Exit considers trade secrets, along with confidential matters, recruiting techniques, operational, accounting and quality control procedures, and other methods developed by Exit, as critical to their system. These elements, combined as 'know-how,' are unique to Exit and essential for the franchise's operation. Franchisees must acknowledge that these trade secrets are owned by Exit and are vital to the franchise's success.

The franchisee is obligated to maintain all trade secrets in the strictest confidence. This means they cannot use or disclose these secrets at any time, except when performing their duties under the franchise agreement. This obligation continues until the information no longer qualifies as a trade secret through no fault of the franchisee. Franchisees must also diligently protect these trade secrets against any loss resulting from inadvertent or unauthorized disclosure. Furthermore, franchisees must adhere to any guidelines established by Exit to safeguard this information.

There are exceptions to these confidentiality obligations. Franchisees are not bound to keep information confidential if they can prove that it (a) is or becomes publicly available without any improper action by the franchisee, (b) was already in the franchisee's possession without any restrictions prior to receiving it from Exit, (c) was rightfully disclosed to the franchisee by a third party without restrictions, or (d) is required to be disclosed by a court order. These exceptions provide some flexibility, but the franchisee bears the burden of proof to demonstrate that any of these conditions apply. Failure to comply with these obligations could result in legal action by Exit to protect its trade secrets and confidential information.