What rights does an Extreme Art Studio franchisee acquire in the Confidential Information?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
6. CONFIDENTIAL INFORMATION.
6.1 CONFIDENTIAL INFORMATION DEFINED. We and our affiliates possess (and may continue to develop and acquire) certain confidential information, some of which constitutes trade secrets under applicable law ("Confidential Information"), relating to developing and operating Extreme Art Studio Businesses, whether or not marked confidential, including (without limitation):
- 6.1.1 training and operations materials and manuals, including the Franchise Operations Manual;
- 6.1.2 the System Standards, and other methods, formats, specifications, standards, systems, procedures, techniques, sales and marketing techniques, knowledge, and experience used
in developing, promoting and operating Extreme Art Studio Businesses, including the proprietary teaching techniques used by teachers of Extreme Art Studio Businesses;
- 6.1.3 market research and promotional, marketing, and advertising strategies, materials and programs for Extreme Art Studio Businesses;
- 6.1.4 strategic plans, including expansion strategies and targeted demographics;
- 6.1.5 knowledge of, specifications for, suppliers of, and methods of ordering Operating Assets and other products and supplies;
- 6.1.6 any computer software or similar technology which is proprietary to us, our affiliates, or the System, including, without limitation, the Computer System, digital passwords and identifications, and any source code of, and data, reports, and other printed materials generated by, the software or similar technology;
- 6.1.7 the System Website (defined in Section 9.5 below);
- 6.1.8 knowledge of the operating results and financial performance of Extreme Art Studio Businesses other than the Franchised Business;
- 6.1.9 information generated by, or used or developed in, the Franchised Business's operation, including customer information, buying habits, preferences, demographic information and related information, and any other information contained from time to time in the Computer System or otherwise in the System;
- 6.1.10 all or part of the Marks; and
- 6.1.11 any other information designated as confidential or proprietary by us.
Unless otherwise specified, each and every one of your obligations to take or refrain from taking specific actions, or to engage or refrain from engaging in specific activities, set forth in this Section 5, shall also apply to each of your owners.
- 4.3.1 We will provide you with access to some or all of the Franchise Operations Manual on a restricted website or extranet to which you will have access.
We may modify the Franchise Operations Manual periodically to reflect changes in System Standards.
You agree that the Franchise Operations Manual's contents are confidential and that you will not disclose the Franchise Operations Manual to any person other than teachers or employees of the Franchised Business who need to know its contents.
You may not at any time print, distribute, or otherwise communicate any part of the Franchise Operations Manual, except as authorized by this Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, franchisees do not acquire rights to the confidential information, but rather have obligations to protect it. The franchisee acknowledges that Extreme Art Studio and its affiliates possess confidential information related to operating Extreme Art Studio Businesses, which may include trade secrets. This information covers a wide range of aspects, such as training materials, system standards, marketing strategies, supplier information, proprietary software, the System Website, operating results of other Extreme Art Studio Businesses, customer data, and the Marks.
The Franchise Operations Manual contains confidential information, and franchisees must not disclose it to anyone other than employees who need to know it. Franchisees are also restricted from printing, distributing, or communicating any part of the manual without authorization. The franchisee's access to the Franchise Operations Manual is provided via a restricted website or extranet, and Extreme Art Studio retains the right to modify the manual periodically to reflect changes in System Standards.
Furthermore, the franchisee's owners also have obligations regarding confidential information. The franchisee must ensure that their owners comply with the obligations to protect the confidential information. This underscores the importance of maintaining the confidentiality of Extreme Art Studio's proprietary information to protect the brand's reputation and the uniformity of operations within the franchise system.
In practical terms, this means an Extreme Art Studio franchisee must take proactive steps to safeguard all confidential information provided by the franchisor. This includes controlling access to the Franchise Operations Manual, protecting digital passwords, and ensuring that employees and owners understand their confidentiality obligations. Failure to comply with these requirements could lead to legal repercussions and damage the Extreme Art Studio brand.