What measures must a Fly Fitness franchisee take to maintain the confidentiality of Confidential Information?
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.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 32–33)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees have several obligations regarding confidential information. Fly Fitness defines confidential information broadly, including trade secrets, methods, customer lists, vendor relationships, sales information, costs, software, website design, operational systems, marketing plans, and other proprietary information. Franchisees must take all reasonable measures to protect this information.
Specifically, franchisees must prevent unauthorized disclosure or use of confidential information. Franchisees cannot reveal confidential information to any person or use it for any other business during or after the franchise term. Copying or providing confidential information to third parties is prohibited unless Fly Fitness provides written authorization. Franchisees are also required to inform Fly Fitness immediately if they become aware of any unauthorized use of confidential information.
Furthermore, all personnel with access to confidential information must sign a Confidentiality/Non-Competition Agreement. This agreement ensures that employees also understand their obligations to protect Fly Fitness's proprietary information. This is a common practice in franchising to safeguard the franchisor's business methods and trade secrets. By implementing these measures, Fly Fitness aims to maintain the integrity and competitive advantage of its system.
In addition to the franchisee's obligations, Fly Fitness will indemnify the franchisee for losses resulting from third-party claims related to the franchisee's use of confidential information, provided the franchisee strictly complies with the Franchise Agreement. This offers some protection to the franchisee, but strict adherence to the agreement is critical. Franchisees should consult legal counsel to fully understand their obligations and the scope of the indemnity.