What is the Floyds 99 franchisee's obligation regarding the confidentiality of the Licensed Methods?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
22.3 Confidentiality of Proprietary Information. The Franchisee and the Franchisor acknowledge that the distinctive business format, plans, methods, data, processes, marketing systems, manuals, product formulas, techniques, designs, layouts, operating procedures, trademarks, proprietary marks and information and know-how of the Franchisor which are developed and utilized in connection with the Licensed Methods are proprietary and confidential ("Confidential Information"). Such Confidential Information is unique, exclusive property and a trade secret of the Franchisor and has valuable goodwill associated with it. The Franchisee acknowledges that any unauthorized disclosure or use of the Confidential Information would be wrongful and would cause irreparable injury and harm to the Franchisor. It is understood that Confidential Information is deemed to include, without limitation, clients lists, vendor lists, product formulas, any and all information contained in the Operations Manual, and any information of whatever nature which gives the Franchisor and its affiliates an opportunity to obtain an advantage over its competitors who do not have access to, know or use such lists, written materials, formulas or information. The Franchisee further acknowledges that the Franchisor has expended a great amount of effort and money in obtaining and developing the Confidential Information, that the Franchisor has taken numerous precautions to guard the secrecy of the Confidential Information, that it would be very costly for competitors to acquire or duplicate the Confidential Information and that any unauthorized disclosure of such Confidential Information shall cause irreparable harm to the Franchisor. Consequently, the Franchisee shall not at any time, publish, disclose, divulge or in any manner communicate to any person, firm, corporation, association, partnership or any other entity whatsoever or use, directly or indirectly, for its own benefit or for the benefit of any person, firm, corporation or other entity other than for the use of the Franchisor or the Franchisee's FLOYD'S 99 Shop, any of the Confidential Information of the Franchisor or its affiliates. The Franchisor and the Franchisee agree that the Confidential Information does not include information that is generally available to the public.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, franchisees must maintain the confidentiality of the Licensed Methods as outlined in Section 22.3 of the franchise agreement. The Licensed Methods encompass the distinctive business format, plans, methods, data, processes, marketing systems, manuals, product formulas, techniques, designs, layouts, operating procedures, trademarks, proprietary marks, information, and know-how developed and utilized by Floyds 99. These methods are considered proprietary and confidential, representing trade secrets of Floyds 99 with substantial goodwill associated with them.
The FDD emphasizes that any unauthorized disclosure or use of this confidential information by the franchisee would be a breach of the agreement, causing significant and irreparable harm to Floyds 99. Confidential Information includes client and vendor lists, product formulas, the contents of the Operations Manual, and any information that provides Floyds 99 with a competitive advantage.
Therefore, franchisees are strictly prohibited from publishing, disclosing, divulging, or communicating any of the confidential information to any third party, or using it for their own benefit or the benefit of others, except for the operation of their Floyds 99 shop. The agreement clarifies that information generally available to the public is excluded from this confidentiality obligation. This obligation extends to the franchisee's employees, as the franchisee is responsible for ensuring their compliance with these confidentiality terms.
This obligation is a standard practice in franchising, as franchisors need to protect their intellectual property and trade secrets. Prospective Floyds 99 franchisees should carefully review Section 22.3 to fully understand the scope of the confidential information and the restrictions on its use and disclosure, both during and after the franchise term.