Is disclosing confidential information grounds for immediate termination of the Gokhale Method franchise agreement?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
. COVENANTS
- 17.1. In-Term Covenants. You specifically acknowledge that, pursuant to this Agreement, you will receive valuable, specialized training and Confidential Information, including, without limitation, information regarding the Gokhale Method and techniques used by us and the System. You covenant that during the Term of this Agreement, except as otherwise approved in writing by us, you shall not, either directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person or legal entity:
- 17.1.1. Divert or attempt to divert any present or prospective customer of any Gokhale Method class, service or product to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System;
- 17.1.2. Employ or seek to employ any person who is at that time employed by us, our Affiliates, or by any of our other franchisees, or otherwise directly or indirectly induce such person to leave his or her employment; or
- 17.1.3. Own, maintain, operate, engage in, act as a consultant for, perform services for, or have any interest in any Competitive Business or offer to sell or sell any services, equipment, product or other item which is the same as, or substantially similar to, any of the services, equipment, products or other items offered by a Gokhale Method Institute location.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
Based on the 2024 Gokhale Method Franchise Disclosure Document, franchisees receive valuable, specialized training and confidential information, including information regarding the Gokhale Method and techniques used by the system. The franchisor may designate any information provided to the franchisee as "Confidential," and the franchisee agrees not to disclose it, during or after the agreement, except as permitted in writing. Confidential information includes the Teacher's Manual, teaching scripts, policy statements, know-how, techniques, proprietary software, and any other information not available to the general public.
The FDD states that any failure to comply with the confidentiality requirements will cause irreparable injury to Gokhale Method. In the event of such a failure, the franchisee agrees to pay all court costs and reasonable attorney's fees incurred by Gokhale Method in obtaining specific performance of, or an injunction against violation of, the requirements of this section, or such other relief sought by them.
The excerpt from the Gokhale Method FDD does not explicitly state that disclosing confidential information is grounds for immediate termination of the franchise agreement. The FDD does state the repercussions of breaching confidentiality, but it does not specify whether this breach would lead to immediate termination. A prospective franchisee should review the franchise agreement in full and seek clarification from the franchisor regarding the specific conditions under which the agreement can be immediately terminated.