What is the legal basis for the Associate's agreement regarding Confidential Information and non-competition with Floyds 99?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
RECITALS
- A. The Company has developed methods for establishing and operating franchises for the operation of retail hair care businesses ("FLOYD'S 99 Shops" or "Barbershops") which use the service mark "FLOYD'S 99" and related service marks, trade names and trademarks ("Marks");
- B. The Company has developed methods for establishing, operating and promoting Barbershops pursuant to the Company's distinctive business format, plans, methods, data, processes, marketing systems, formulas, techniques, designs, layouts, operating procedures, trademarks, proprietary marks and information and know-how of the Company ("Confidential Information") and such Confidential Information as may be further developed from time to time by the Company;
- C. The Company and its affiliates have established substantial goodwill and an excellent reputation with respect to the quality of services and products available, which goodwill and reputation have been and will continue to be of major benefit to the Company;
- D. Associate is or will become involved with the Company in the capacity of an officer, partner, director, agent, Principal Manager, employee, principal, beneficial owner or as an immediate family member of one of the foregoing persons, all of whom are associated with a FLOYD'S 99 Shop (the "Franchised Business") pursuant to the terms of a Franchise Agreement between the Company and the party identified as the "Franchisee" at the end of this Agreement, and in such capacity, Associate will become privileged as to certain Confidential Information; and
- E. Associate and the Company have reached an understanding with regard to nondisclosure by Associate of Confidential Information and with respect to noncompetition by Associate with the Company.
NOW THEREFORE, in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Associate and the Company, intending legally to be bound, agree as follows:
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 FDD, the legal basis for the Associate's agreement concerning confidential information and non-competition is rooted in several key points. The agreement acknowledges that Floyds 99 has developed proprietary methods, plans, data, processes, marketing systems, formulas, techniques, designs, layouts, operating procedures, trademarks, and information, all considered Confidential Information. This information gives Floyds 99 a competitive advantage. The Associate, by virtue of their association with a Floyds 99 shop, gains access to this Confidential Information.
The agreement is further based on the understanding that Floyds 99 and its affiliates have built substantial goodwill and an excellent reputation, which benefits the company. The Associate and Floyds 99 have come to an understanding regarding the Associate's nondisclosure of Confidential Information and noncompetition with the company. The agreement explicitly states that it is made in consideration of the foregoing points, the mutual promises contained within the agreement, and other good and valuable consideration, with both parties intending to be legally bound.
This agreement ensures that Associates are legally obligated to protect Floyds 99's Confidential Information and refrain from competing with the company. This is a common practice in franchising to protect the franchisor's business model, trade secrets, and market position. Prospective franchisees should carefully review the terms of the Associate's agreement to understand the scope of the confidentiality and non-competition obligations, as unauthorized disclosure or competitive activities could result in legal consequences.