What is the Fly Fitness franchisee's responsibility regarding the confidentiality of information contained in the manual?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
y issue to Franchisee from time to time, whether or not such directives are included in the Manual, and any other manual and materials created or approved for use in the operation of the Franchised Business.
- 19.1.2. Franchisee and Principal(s) shall at all times treat the Manual, written directives, and other materials and any other confidential communications or materials, and the information contained therein, as confidential and shall maintain such information as trade secret and confidential in accordance with this Article and this Agreement. Franchisee and Principal(s) shall not divulge and make such materials available to anyone other than those of Franchisee's employees who require the information contained therein to operate the Franchised Business. Franchisee shall, prior to disclosure, fully train and inform its employees on all the restrictions, terms, and conditions under which it is permitted to use Franchisor's intellectual, proprietary, and confidential information; and shall ensure its employees' compliance with such restrictions, terms, and conditions. Franchisee, Principal(s), and any person working with Franchisee shall agree not, at any time to use, copy, duplicate, record or otherwise reproduce these materials, in whole or in part, or otherwise make the same available to any person other than those authorized above, without Franchisor's prior written consent.
- 19.1.3. The Manual, written directives, and other materials and any other confidential communications provided or approved by Franchisor shall at all times remain the sole property of Franchisor. Franchisee shall maintain the Manual and all Franchisor's confidential and proprietary materials at all times in a safe and secure location, shall take all reasonable measures to prevent unauthorized access thereto, whether any attempted unauthorized access takes the form of physical access or access via computer or telecommunications networks or otherwise, and shall report the theft or loss of the Manual, or any portion thereof, immediately to Franchisor. At a minimum, Franchisee shall, in the case of computer and telecommunications networks, use the latest available firewall, encryption and similar technology to prevent unauthorized access. Franchisee shall delete all electronic copies and return and cease using any physical copy of the Manual and other confidential and proprietary materials to Franchisor immediately upon request or upon transfer, termination, or expiration of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees and their principals must treat the operations manual, written directives, confidential communications, and the information within them as confidential, maintaining them as trade secrets. They are prohibited from divulging these materials to anyone except employees who need the information to operate the franchised business.
Prior to disclosing any confidential information, Fly Fitness franchisees must fully train and inform their employees about the restrictions, terms, and conditions for using the franchisor's intellectual, proprietary, and confidential information. Franchisees are responsible for ensuring their employees comply with these restrictions. Franchisees must also ensure that their employees sign confidentiality and non-compete agreements with the same provisions as in the franchise agreement.
Fly Fitness franchisees must prevent unauthorized access to the manual and confidential materials, whether physical or via computer networks, using the latest firewall and encryption technology. Any theft or loss of the manual must be immediately reported to Fly Fitness. Upon request or termination of the agreement, all electronic copies must be deleted, and physical copies of the manual and confidential materials must be returned to Fly Fitness. These measures aim to protect Fly Fitness's trade secrets and maintain the integrity of the franchise system.