What are the consequences, as detailed in Item 6, if a Focalpoint Coaching franchisee fails to maintain the confidentiality of proprietary information?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
I acknowledge and understand that the provisions of this Agreement, including my representations, covenants, and warranties (as applicable) given hereunder, are necessary and integral to this Agreement and to Company's and Franchisee's interests under the Franchise Agreement, and are intended to:
- (i) preclude not only direct competition, but also all forms of indirect competition, such as consultation for Competitive Businesses, service as an independent contractor for Competitive Businesses, or any assistance or transmission of information of any kind which would be of any material assistance to a competitor;
- (ii) bind any person or entity having any legal or beneficial interest in me, or traceable to, down or through me, including (without limitation) any of member of my Immediate Family, any direct or indirect beneficiary, any partner (general or limited) or proprietor of mine, and any other such related person or entity, regardless of how many levels or tiers there may be between any such described person or entity and me; and
- (iii) identify for me, toward the goal of preserving through this Agreement, Company's protectable legal interests in the System, clients of FocalPoint Franchised Businesses, the Confidential Information, and the goodwill associated with the Marks.
I also expressly acknowledge my possession of skills and abilities of a general nature, and the opportunity for exploiting such skills in other ways than the operation or involvement in the activities of a FocalPoint Franchised Business or a Competitive Business, so that enforcement of my covenants made in this Agreement will not deprive me of my personal goodwill or ability to earn a living after the effective date of expiration or termination of my relationship with Franchisee, the Business, or FocalPoint Franchised Businesses generally. If I fail or refuse to abide by any of my foregoing obligations or promises made under this Agreement, and Company or Franchisee obtains enforcement in a judicial or arbitration proceeding, then my obligations and responsibilities specified under the breached covenant will be tolled during the period(s) of time that the covenant is breached and/or Company or Franchisee seeks to enforce it, and will continue for two (2) years starting from the effective date of the order enforcing the covenant.
What This Means (2025 FDD)
Based on the 2025 FocalPoint Coaching Franchise Disclosure Document, Item 22 outlines the franchisee's obligations regarding confidential information but does not explicitly detail the consequences of failing to maintain its confidentiality. Item 22 defines what constitutes confidential information, including site selection criteria, training materials, sales techniques, client lists, supplier information, operating results, computer systems, and any other information designated as proprietary. The franchisee acknowledges that they will not acquire any interest in the confidential information beyond the right to use it as specified by FocalPoint Coaching during the term of the agreement. The franchisee also agrees to protect this information. Item 22 further states that if the franchisee fails to abide by their obligations and FocalPoint Coaching obtains enforcement in a judicial or arbitration proceeding, the franchisee's responsibilities will be tolled during the period of the breach and will continue for two years from the date of the enforcement order.
While Item 22 describes the franchisee's duty to protect confidential information and the tolling of obligations upon breach, it does not explicitly state the specific consequences, such as monetary penalties or termination of the franchise agreement, that might arise from a failure to maintain confidentiality. Item 17, however, provides a table summarizing termination events, but the provided excerpt does not include information about unauthorized use of proprietary information.
A prospective FocalPoint Coaching franchisee should carefully review the entire Item 17 within the FDD to understand all potential termination events. Additionally, the franchisee should seek clarification from the franchisor regarding the specific penalties or remedies FocalPoint Coaching may pursue if the franchisee breaches the confidentiality obligations outlined in the franchise agreement. Understanding these consequences is crucial for assessing the risks associated with the franchise and ensuring compliance with the agreement.