To whom can a Fitstop franchisee divulge 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 sharing confidential information related to the Fitstop business. This restriction applies both during the term of the Franchise Agreement and at any time thereafter. Franchisees are prohibited from communicating, divulging, or using confidential information for the benefit of any other person, partnership, association, corporation, or limited liability company. This broad restriction covers trade secrets, copyrighted materials, methods, techniques, and know-how concerning the operation of the Fitstop franchised business.
However, there is an exception. A Fitstop franchisee may share confidential information with their employees, but only those who require access to it in order to fulfill their job responsibilities. This allowance is conditional, as the franchisee must ensure that these employees sign a confidentiality and non-competition agreement.
Fitstop requires that the Designated Manager and any personnel with access to confidential information sign a Confidentiality and Non-Competition Agreement. This agreement, in a form prescribed by Fitstop, ensures that employees maintain the confidentiality of the information they receive and restricts their ability to work for a competitor during their employment. Fitstop is identified as a third-party beneficiary to this agreement, granting them independent enforcement rights. This measure is in place to protect Fitstop's proprietary information and maintain a competitive advantage.