During and after the Fitstop Franchise Agreement term, what is a franchisee prohibited from doing with confidential information?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
During the term of the Franchise Agreement, you will receive information which we consider trade secrets and confidential information. You may not, during the term of the Franchise Agreement or any time after that, communicate, divulge, or use for the benefit of any other person, partnership, association, corporation, or limited liability company any of these trade secrets, copyrighted materials, methods and other techniques and know-how concerning the operation of the Franchised Business (the "Confidential Information"). You may divulge such Confidential Information only to your employees who must have access to it in order to fulfil their employment obligations.
You must require your Designated Manager and any personnel having access to any of our Confidential Information to sign our then-current form of Confidentiality and Non-Competition Agreement set forth in our then-current Manuals or form of franchise agreement, where these individuals agree that they will maintain the confidentiality of information they receive in connection with their employment and restrict their right to work for a competitor while they are employed by you. This confidentiality agreement, which will be in a form that we prescribe, will identify us as a third-party beneficiary to the agreement and will give us independent enforcement rights.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 38–40)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees are restricted from using or sharing confidential information both during and after the Franchise Agreement term. Fitstop considers trade secrets and confidential information any information received during the term of the Franchise Agreement. Franchisees are prohibited from communicating, divulging, or using this "Confidential Information" for the benefit of any other person, partnership, association, corporation, or limited liability company. The definition of confidential information includes copyrighted materials, methods, techniques, and know-how related to the operation of the Fitstop franchised business.
However, franchisees may share Confidential Information with their employees, but only if those employees need the information to fulfill their job duties. In this case, the franchisee must ensure that these employees sign a Confidentiality and Non-Competition Agreement. This agreement must adhere to Fitstop's current form, as outlined in the manuals or franchise agreement.
Fitstop is identified as a third-party beneficiary in the confidentiality agreement, granting them independent enforcement rights. This means Fitstop can directly enforce the confidentiality agreement against the franchisee's employees if necessary. This measure is in place to protect Fitstop's proprietary information and maintain a competitive advantage. The FDD also lists examples of confidential information, including systems, processes, procedures, software, databases, logos, manuals, advertising information, and promotional materials.