Does the Fly Fitness agreement state that the developer acknowledges receiving valuable Confidential Information?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
is Agreement or any interest herein and shall be perpetually binding upon Developer.
- 8.2 Protection of Information. Developer shall take all steps necessary, at Developer's own expense, to protect the Confidential Information and shall immediately notify Franchisor if Developer finds that any Confidential Information has been divulged in violation of this Agreement.
- 8.3 Noncompetition Covenants. Developer acknowledges that, pursuant to this Agreement, Developer will receive valuable training, trade secrets and Confidential Information of the System that are beyond the present knowledge, training, and experience of Developer. Developer acknowledges that such specialized training, trade secrets and Confidential Information provide a competitive advantage and will be valuable to him or her in the development and operation of Franchised Businesses, and that gaining access to such specialized training, trade secrets and Confidential Information is, therefore, a primary reason why Developer is entering into this Agreement. In consideration for such specialized training, trade secrets, Confidential Information and rights, Developer covenants that, except as otherwise approved in writing by Franchisor:
- 8.3.1 During the term of this Agreement, Developer shall not, either directly or indirectly, for himself or herself or through, on behalf of, or in conjunction with, any person or entity (i) divert, or attempt to divert, any business or customer of any Franchised Business to be developed hereunder or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any restaurant or eatery business similar to the System ("Competitive Business"); or (iii) seek to employ any person who is at that time employed by Franchisor; or (iv) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (v) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the
- business of the Franchisor or any Fly Fitness franchisees or Franchisor-affiliated outlets.
- 8.3.2 Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, Developer shall not, either directly or indirectly, for himself or herself or through, on behalf of or in conjunction with any person or entity (i) divert, or attempt to divert, any business or customer of the Franchised Businesses to be developed hereunder or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; or (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any Competitive Business within ten (10) miles of the Territory or any Fly Fitness;
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the agreement states that the developer acknowledges receiving valuable training, trade secrets, and Confidential Information. Specifically, the developer recognizes that this specialized training and information provide a competitive advantage and are a primary reason for entering the agreement. This acknowledgment is part of the consideration for the non-competition covenants within the agreement.
The Fly Fitness agreement emphasizes the importance of protecting the Confidential Information. The developer is obligated to take necessary steps, at their own expense, to safeguard this information and must promptly notify Fly Fitness if any Confidential Information is divulged in violation of the agreement. This highlights the franchisor's concern about protecting its proprietary information and maintaining a competitive edge.
Furthermore, the agreement specifies that the developer will have access to Fly Fitness's trade secrets, including formulas, recipes, methods, processes, customer lists, vendor partnerships, sales and technical information, financial data, costs, product prices and names, software tools and applications, website and email design, products, services, equipment, technologies, procedures, the Manual, advertising methods, instructional materials, and components of the System. The developer is prohibited from communicating, divulging, or using this Confidential Information for the benefit of any other person or entity during and after the agreement's term. This obligation survives the termination or transfer of the agreement and is perpetually binding on the developer.