Regarding the Confidentiality and Non-Compete Agreement for Fly Fitness, who is considered an intended third-party beneficiary, and what rights does this beneficiary have?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
WHEREAS, in connection with his or her duties, it will be necessary for Covenantor to have access to some or all of the confidential information, knowledge, know-how, techniques, contents of the Fly Fitness operations manual and other materials used in or related to the System and/or 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.
- c. Covenantor shall not at any time disclose or permit the disclosure of the Confidential Information except, and only then to the limited extent necessary, to those employees of Franchisee for training and assisting such employees in the operation of the Franchised Business.
- d. Covenantor shall surrender any material containing some or all of the Confidential Information to Franchisee or Franchisor, upon request, or upon termination of employment or association with Franchisee.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to the 2024 Fly Fitness Franchise Disclosure Document, the Confidentiality and Non-Compete Agreement involves the franchisee, the franchisor (Fly Fitness Franchise, L.L.C.), and an individual referred to as the "Covenantor." The Covenantor gains access to confidential information related to the Fly Fitness system.
The document states that the confidential information provides economic advantages to Fly Fitness and its licensed users, including the franchisee. The franchisee acknowledges the importance of protecting this information and obtains a written agreement from the Covenantor to safeguard it and prevent unfair competition. The Covenantor's access to and right to use the confidential information is considered valuable consideration for their commitments within the agreement.
The Covenantor is obligated to maintain the confidentiality of the information and use it only for their role with the franchisee in operating the Fly Fitness franchised business. They cannot make copies of confidential documents without Fly Fitness's permission and can only disclose the information to franchisee employees for training purposes. Upon request or termination of employment, the Covenantor must return all materials containing confidential information to either the franchisee or Fly Fitness.