What proprietary information must the manager of an Exit franchise maintain confidentiality of?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
As a Franchisee, you, or if you are an entity, an officer, member, director, partner or other person named as the real estate broker of record, must devote full time and best efforts to the Franchise business. If the Franchisee is operating as a corporation, partnership or limited liability company, you and all other equity holders in the company must execute a Personal Guaranty of the Franchise Agreement. In addition, in community or marital property states, your spouse may be required to sign the Personal Guaranty. Your business must be directly supervised "on premises" by a manager who has successfully completed EXIT's training programs. The on-premises manager cannot have an interest or business relationship with any of EXIT's competitors. The manager need not have an ownership interest in your corporate or partnership Franchise. The manager must sign a written agreement to maintain confidentiality of the proprietary information described in ITEM 14 and to conform with the covenants not to compete described in ITEM 17 of this Disclosure Document.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 27)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the manager of an Exit franchise must sign a written agreement to maintain the confidentiality of proprietary information. This requirement ensures that sensitive business information remains protected and isn't disclosed to competitors or used in any way that could harm the Exit system. The specific details of what constitutes proprietary information are further described in Item 14 of the FDD.
Item 14 indicates that while Exit Realty Upper Midwest does not own or grant rights to patented items, franchisees are permitted to use proprietary information found in the Training Manuals and copyrighted material owned by Exit. Although Exit has not filed for copyright registration for the Training Manuals, it claims a copyright on the entire manual and various advertising and sales promotion materials used within the Exit System.
Franchisees are prohibited from copying any of Exit's confidential information or sharing it with third parties unless authorized by Exit. They are also obligated to promptly report any unauthorized use of this proprietary information. Exit retains the right to control any litigation involving proprietary information and will defend franchisees against third-party claims related to their use of this information. This comprehensive approach to protecting proprietary information is a standard practice in franchising, aimed at maintaining the integrity and competitive advantage of the brand.