What are the franchisee's obligations regarding confidential information as outlined in the Face Foundrie Franchise Agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor's business and operating methods and Confidential Information, disclosure and use of which would prejudice the interest of Franchisor and its franchisees and licensees of other Face Foundrié Facial Bars. Franchisee further understands and acknowledges the difficulty of ascertaining monetary damages and the irreparable harm that would result from breach of these covenants. If any part of this restriction is found to be unreasonable in scope, time or distance, such scope, time or distance may be reduced by appropriate order of the court to that deemed reasonable. Franchisor shall, as a matter of course, receive injunctive relief to enforce such covenants in addition to any other relief to which it may be entitled at law or in equity. Franchisor shall receive such injunctive relief without the necessity of posting bond or other security, such bond or other security being hereby waived.
7.02 Confidential Information.
- (a) Franchisee acknowledges and agrees that in connection with the ownership, development and/or operation of Face Foundrié Facial Bars by Franchisor and its Affiliates, Franchisor and its Affiliates have developed at great expense Confidential Information that is part of the System and that is not commonly known by or available to the public.
This Confidential Information does not include any information that (i) is commonly known by or available to the public; (ii) has been voluntarily disclosed to the public by Franchisor or its Affiliates; (iii) has been independently developed or lawfully obtained by Franchisee (other than by virtue of disclosure by Franchisor or its Affiliates in connection with this Agreement); or (iv) has otherwise entered the public domain through lawful means.
- (b) Franchisee and each Restricted Party agree that while this Agreement remains in effect such party will not, directly or indirectly, disclose or publish to any Person, or copy or use for such party's own benefit, or for the benefit of any other Person, any Confidential Information, except as required to carry out Franchisee's obligations under this Agreement or as Franchisor has otherwise expressly approved in writing.
As between Franchisor, on the one hand, and Franchisee and the Restricted Parties, on the other hand, all Confidential Information is the sole and exclusive property of Franchisor.
Franchisee and each Restricted Party agree that the restrictions contained in the preceding sentences in this Section 7.02(b) will remain in effect with respect to Confidential Information for five (5) years following termination or expiration of this Agreement for any reason; provided, however, if the Confidential Information rises to the level of a trade secret under applicable law, then such restriction shall remain in effect until such time as the information does not constitute a trade secret.
Franchisee also agrees that it and all of its Personnel will take appropriate steps to protect Confidential Information from any unauthorized disclosure, copying or use.
At any time upon Franchisor's request, and in any event upon expiration or termination of this Agreement, Franchisee will immediately return any copies of documents where there are materials containing Confidential Information and will take appropriate steps to permanently delete and render unusable any Confidential Information stored electronically.
- 7.03 Data and Customers.
In addition to the obligations set forth in Sections 7.01 and 7.02 above, Franchisee: (a) shall not reproduce, release or in any way make available or furnish, either directly or indirectly, to any person or Entity at any time, any information concerning the customers of Franchisee under this Agreement, which may be used to solicit sales from such customers including, but not limited to, the type of sales covered by this Agreement; (b) shall protect all said customer information from disclosure, destruction, loss or theft during the Term of this Agreement and until all copies of customer lists and copies of all other information concerning customers are turned over to Franchisor; (c) agrees not to use or permit to be used said information concerning Franchisee's customers in any manner except in the performance of this Agreement; and (d) shall at all times maintain any information, including lists, relating to the customers of Franchisee separate and distinct from any customer information Franchisee may maintain that is unrelated to this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, franchisees have specific obligations regarding confidential information. Face Foundrie considers its business and operating methods, along with other confidential information, as crucial assets. The disclosure or unauthorized use of this information could significantly harm Face Foundrie and its franchisees. The Franchise Agreement emphasizes the difficulty in calculating monetary damages resulting from a breach of these confidentiality covenants and acknowledges the potential for irreparable harm. Face Foundrie is entitled to injunctive relief to enforce these covenants, without needing to post a bond or security. This means Face Foundrie can seek immediate court orders to prevent further disclosure or misuse of confidential information.
The Franchise Agreement defines confidential information as any non-public information related to the Face Foundrie system, including equipment, products, standards, specifications, operating procedures, and financial performance data. This also extends to customer-related data. Franchisees must not disclose or use this confidential information for their own benefit or the benefit of others, unless required to fulfill their obligations under the Franchise Agreement or with Face Foundrie's written approval. All confidential information remains the sole and exclusive property of Face Foundrie.
These confidentiality obligations extend beyond the term of the Franchise Agreement. Franchisees and any restricted parties remain bound by these restrictions for five years after the agreement expires or terminates. However, if the confidential information qualifies as a trade secret under applicable law, the restriction remains in effect as long as the information retains its trade secret status. Franchisees must also take appropriate measures to protect confidential information from unauthorized access, copying, or use. Upon request from Face Foundrie or at the end of the agreement, franchisees must return or permanently delete any documents or electronic storage containing confidential information. Additionally, franchisees are prohibited from reproducing, releasing, or making available any customer information that could be used to solicit sales, and they must protect this information from disclosure, destruction, loss, or theft.