Can a Fly Fitness franchisee use confidential information for their own benefit after the agreement expires?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee and Principal(s) acknowledge and accept that during the term of this Agreement Franchisee and Principal(s) will have access to Franchisor's trade secrets, including, but not limited to, curriculum, methods, processes, client lists, vendor partnerships and/or relationships, sales and technical information, financial information, costs, pricing, software tools and applications, website and/or email design, products, services, equipment, technologies and procedures relating to the operation of the Franchised Business; the Manual; methods of advertising and promotion; instructional materials; any other information which Franchisor may or may not specifically designate as "confidential" or "proprietary"; and the components of the System, whether or not such information is protected or protectable by patent, copyright, trade secret or other proprietary rights (collectively referred to herein as the "Confidential Information").
Neither Franchisee nor any Principal shall, during the term of this Agreement and thereafter, communicate or divulge to, or use for the benefit of, any other person or entity, and, following the expiration or termination of this Agreement, shall not use for their own benefit, any Confidential Information that may be communicated to Franchisee or any Principal or of which Franchisee or any Principal may be apprised in connection with the operation of the Franchised Business under the terms of this Agreement.
Franchisee and any Principal shall not divulge and make any Confidential Information available to anyone other than those of Franchisee's employees who require the Confidential Information to operate the Franchised Business and who have themselves entered into confidentiality and non-compete agreements containing the same provisions as contained in this Agreement, in accord
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees are restricted from using confidential information for their own benefit even after the franchise agreement expires. Specifically, franchisees acknowledge that they will have access to trade secrets, curriculum, methods, client lists, and financial information, which constitute confidential information.
The agreement explicitly states that neither the franchisee nor any principal shall, during the term of the agreement and thereafter, communicate or divulge this confidential information to any other person or entity. Furthermore, following the expiration or termination of the agreement, they are prohibited from using this confidential information for their own benefit. This includes all information, whether or not it is specifically designated as "confidential" or "proprietary," and covers various aspects of the Fly Fitness system.
This provision is designed to protect Fly Fitness's proprietary information and maintain a competitive advantage. By agreeing to these terms, franchisees acknowledge the importance of restricting the use, access, and dissemination of confidential information, thereby safeguarding the Fly Fitness system against unfair competition. Franchisees must also ensure their employees sign confidentiality and non-compete agreements with the same provisions.