What are the consequences for a Fly Fitness franchisee if they fail to maintain the confidentiality of the franchisor's proprietary information (Item 14), considering their obligations under the Franchise Agreement (Item 9)?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
ts are the same as the obligations for Trademarks described in Item 13 of this disclosure document.
During the term of the Franchise Agreement, you may have access to and become acquainted with our trade secrets, including, but not limited to, methods, formulas, processes, customer lists, vendor partnerships and/or relationships, sales and technical information, costs, product prices and names, software tools and applications, website and/or email design, products, services, equipment, technologies and procedures relating to the operation of your Fly Fitness outlet; systems of operation, services, programs, products, procedures, policies, standards, techniques, requirements and specifications which are part of the System; the Operations Manual; methods of advertising and promotion; instructional materials; marketing plans, business methods, research, development or know-how, any other information which we may or may not specifically designate as "confidential" or "proprietary", and the components of our System whether or not such information is protected or protectable by patent, copyright, trade secret or other proprietary rights (collectively called the "Confidential Information"). You agree that you will take all reasonable measures to maintain the confidentiality of all Confidential Information in your possession or control and that all such Confidential Information and trade secrets shall remain our exclusive property. You may never (during the Initial Term, any Renewal Term, or after the Franchise Agreement expires or is terminated) reveal any of our confidential information to another person or use it for any other person or business. You may not copy any of our Confidential Information or give it to a third party except as we authorize in writing to you prior to any dissemination. Your personnel who have access to our Confidential Information must sign our Confidentiality/Non-Competition Agreement (Franchise Agreement, Attachment 8).
You must promptly tell us when you learn about unauthorized use of any Confidential Information. We are not obligated to take any action but will respond to this information as we think appropriate.
We will indemnify you for losses brought by a third party concerning your use, in strict compliance with the Franchise Agreement, of the Confidential Information.
ITEM 15: OBLIGATIONS OF THE FRANCHISEE TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
The Franchise Agreement requires that you personally supervise your Fly Fitness outlet. Your Fly Fitness outlet must be directly supervised by a general manager who is either the Franchisee or, if the Franchisee is an entity, at least a 10% shareholder in the franchisee entity. Your general manager must successfully complete our Initial Management Training Program and all other training courses we require. If the franchisee is a business entity, your general manager is not required to have an equity interest in the franchisee entity. Your manager must devote full time to the job and cannot have an interest or business relationship with any of our competitors.
Your manager and all other personnel who will have access to our proprietary and Confidential Information and training must sign our Non-Disclosure/Non-Competition Agreement, which is attached to our Franchise Agreement as Attachment 8. If your Franchised Business is owned by an entity, all owners of the entity must personally sign the Franchise Agreement as a Principal. If you are a married individual, your spouse must sign our Personal Guaranty, which is attached to our Franchise Agreement as Attachment 7.
ITEM 16: RESTRICTION ON WHAT FRANCHISEE MAY SELL
You must offer and sell all products and services that are part of the System, and all services and products which we incorporate into the System in the future. You may only offer products and services that we have previously approved.
You may not use our Principal Marks or other trademarks for any other business, and you may not conduct any other business from your Franchised Business location. You cannot engage in any other business that competes with your Franchised Business, with us or our affiliates, or with Fly Fitness outlets owned by other franchisees, whether such business is inside or outside of the Territory.
We may add to, delete from, or modify the products and services that you can and must offer. You must abide by any additions, deletions, and modifications, but only if the changes do not materially and unreasonably increase your obligations under the Franchise Agreement. There are no other limits on our rights to make these changes.
You may only sell products and services in the manner we prescribe. You may only solicit sales from customers in your Territory. Your local advertising must target customers in your Territory, although the reach of your local advertising may extend beyond your Territory. See Item 12 for restrictions on sales within and outside the Territory.
ITEM 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION
THE FRANCHISE RELATIONSHIP
This table lists certain important provisions of the franchise and related agreements. You should read these provisions in the agreements attached to this disclosure document.
| P a g e | 3 3 | | |---|---| | This document was downloaded from franc himp .co m. A ll t h e in fo rmation on this website is published in good faith and for general information | p u rp o s e o n ly . F ra n C h i m p . c o m d o e s n o t m a k e aFnlyy w Fariratnnteiesss a bFoDut Dthe 2co0m2p4le tBen ess, reliability, and | | accuracy of this information. Any action you take upon the information you find on this website (FranChimp.com), is strictly at your own risk. We will not be liable for any losses and/or damages in connection with the use of our website. | |
| P a g e | 3 4 | | |---|---| | This document was downloaded from franc himp .co m. A ll t h e in fo rmation on this website is published in good faith and for general information | p u rp o s e o n ly . F ra n C h i m p . c o m d o e s n o t m a k e aFnlyy w Fariratnnteiesss a bFoDut Dthe 2co0m2p4le tBen ess, reliability, and | | accuracy of this information. Any action you take upon the information you find on this website (FranChimp.com), is strictly at your own risk. We will not be liable for any losses and/or damages in connection with the use of our website. | |
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| This document was downloaded from franc himp .co m. |
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees have a strict obligation to protect the franchisor's confidential information, both during and after the term of the Franchise Agreement. This information includes trade secrets, methods, formulas, processes, customer lists, vendor partnerships, sales and technical data, costs, product prices, software, website design, and the contents of the Operations Manual. Franchisees must take all reasonable measures to maintain confidentiality and cannot reveal this information to any other person or use it for any other business, even after the agreement expires or is terminated. Unauthorized copying or dissemination to third parties is prohibited without Fly Fitness's written consent. All personnel with access to confidential information must sign a Confidentiality/Non-Competition Agreement. Franchisees are required to promptly report any unauthorized use of confidential information. Fly Fitness, however, is not obligated to take any action but will respond as it deems appropriate. If a franchisee uses the confidential information in strict compliance with the Franchise Agreement, Fly Fitness will indemnify them for losses brought by a third party concerning this use.
Failure to protect confidential information can lead to serious repercussions. Upon termination or expiration of the Franchise Agreement, the franchisee must immediately cease operating the Franchised Business and cannot identify themselves as a Fly Fitness owner, franchisee, or licensee. They must also stop using the Marks, any imitation of any Mark, logos, copyrighted material, or other Intellectual Property, Confidential Information, or other confidential or proprietary material. This includes de-identifying the Franchised Business premises by removing all signs, billboards, advertising materials, and stationery displaying the Marks. The franchisee must also cancel any assumed name registrations containing Fly Fitness's Marks and provide evidence of compliance to Fly Fitness within five days of termination or expiration.
Furthermore, both during the term of the agreement and for a period of twenty-four months after termination, the franchisee and its principals are prohibited from engaging in any fitness or exercise business similar to the Fly Fitness system within ten miles of the Territory or any Fly Fitness location. They are also barred from diverting business or customers to competitors, soliciting Fly Fitness employees, or performing any act that could harm the goodwill associated with the Marks and the System. Fly Fitness also reserves the right to direct suppliers to stop furnishing products and supplies to a franchisee in default, after providing five days' written notice. The franchisee has no recourse against Fly Fitness for any losses resulting from these actions.