What is the role of a Designated Manager in protecting Extreme Art Studio's confidential information?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
s that the foregoing Restricted Territory is too broad to be enforceable, then the "Restricted Territory" means the geographic area within a 13-mile radius from Franchisee's Extreme Art Studio Business (and including the premises of the approved location of Franchisee).
"System" means our system for the establishment, development, operation, and management of an Extreme Art Studio Business, including Know-how, proprietary programs and products, Manual, and operating system.
- 2. Background. You are a manager or officer of Franchisee. As a result of this relationship, you may gain knowledge of our System. You understand that protecting the Intellectual Property and our System are vital to our success and that of our franchisees and that you could seriously jeopardize our entire System if you were to unfairly compete with us. In order to avoid such damage, you agree to comply with the terms of this Agreement.
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- Know-How and Intellectual Property. You agree: (i) you will not use the Know-how in any business or capacity other than the Extreme Art business operated by Franchisee; (ii) you will maintain the confidentiality of the Know-how at all times; (iii) you will not make unauthorized copies of documents containing any Know-how; (iv) you will take such reasonable steps as we may ask of you from time to time to prevent unauthorized use or disclosure of the Know-how; and (v) you will stop using the Know-how immediately if you are no longer a manager or officer of Franchisee's Extreme Art Studio Business. You further agree that you will not use all or part of the Intellectual Property or all or part of the System for any purpose other than the performance of your duties for Franchisee and within the scope of your employment or other engagement with Franchisee.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, a manager or officer of the franchisee acknowledges that they may gain knowledge of Extreme Art Studio's System. Protecting the intellectual property is vital to the success of Extreme Art Studio and its franchisees. The manager or officer could seriously jeopardize the entire System if they were to unfairly compete with Extreme Art Studio. To prevent such damage, the manager or officer must comply with the terms of the System Protection Agreement.
The System Protection Agreement stipulates that the manager or officer will not use the Know-how in any business other than the Extreme Art Studio Business operated by the franchisee. They must maintain the confidentiality of the Know-how at all times and avoid making unauthorized copies of documents containing any Know-how. The manager or officer must also take reasonable steps to prevent unauthorized use or disclosure of the Know-how and stop using it immediately if they are no longer a manager or officer of the franchisee's Extreme Art Studio Business. They are also prohibited from using the Intellectual Property or the System for any purpose other than performing their duties for the franchisee.
These restrictions on Know-how, Intellectual Property, and the System do not apply to information that is publicly known or becomes lawfully known in the public domain, unless through a breach of the agreement. If disclosure is required by law, the manager or officer must provide reasonable notice to Extreme Art Studio to allow them to seek protective orders. The manager or officer also agrees not to unfairly compete with Extreme Art Studio while they are a manager or officer of the franchisee's Extreme Art business by engaging in any Prohibited Activities.
In summary, the Designated Manager plays a crucial role in safeguarding Extreme Art Studio's confidential information by adhering to the System Protection Agreement. This agreement outlines specific obligations aimed at preventing the unauthorized use or disclosure of the System's Know-how and Intellectual Property, ensuring the continued success and integrity of the Extreme Art Studio franchise system.