What must a Fly Fitness franchisee do before disclosing confidential information to its employees?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
r concerning the methods of operation of the System (collectively referred to as "Confidential Information").
WHEREAS, the Confidential Information provides economic advantages to Franchisor and licensed users of the System, including Franchisee;
WHEREAS, Franchisee has acknowledged the importance of restricting the use, access and dissemination of the Confidential Information, and Franchisee therefore has agreed to obtain from Covenantor a written agreement protecting the Confidential Information and further protecting the System against unfair competition; and
WHEREAS, Covenantor acknowledges that receipt of and the right to use the Confidential Information constitutes independent valuable consideration for the representations, promises and covenants made by Covenantor herein.
NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, the parties agree as follows:
1. Confidentiality Agreement.
- a. Covenantor shall, at all times, maintain the confidentiality of the Confidential Information and shall use such Confidential Information only in the course of his or her employment by or association with Franchisee in connection with the operation of a Franchised Business under the Franchise Agreement.
- b. Covenantor shall not at any time make copies of any documents or compilations containing some or all of the Confidential Information without Franchisor's express written permission.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a franchisee must obtain a written agreement from their employees (referred to as "Covenantor") protecting the confidential information and the Fly Fitness system against unfair competition before disclosing confidential information to them. This agreement ensures that employees understand the importance of maintaining the confidentiality of the information they receive. The agreement also protects Fly Fitness from potential competitive harm.
The written agreement from the employee (Covenantor) must include that the employee will, at all times, maintain the confidentiality of the Confidential Information and shall use such Confidential Information only in the course of his or her employment. The employee cannot make copies of any documents or compilations containing some or all of the Confidential Information without Fly Fitness's express written permission. The employee must surrender any material containing some or all of the Confidential Information to the franchisee or Fly Fitness, upon request, or upon termination of employment or association with the franchisee.
This requirement is a standard practice in franchising to safeguard proprietary information and maintain a competitive edge. By ensuring that employees sign a confidentiality agreement, Fly Fitness aims to minimize the risk of sensitive information being leaked or misused, which could potentially harm the franchise system. Franchisees should ensure they have a legally sound agreement drafted and implemented to comply with this requirement.