How does the Gokhale Method's royalty fee structure in Item 6 relate to the franchisee's obligation to maintain the confidentiality of proprietary information as described in Item 14?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
Included in our Confidential Information are the Teachers' Manual; teaching scripts and Policy Statements; the information, know-how and techniques that we have imparted to you; proprietary software; and any other information we have provided to you that is not available to the general public.
10.4. Changes and Revisions. We may from time to time revise the contents of the Teachers' Manual, Policy Statements, scripts and any other teaching methods or content, and you expressly agree to comply with each new or changed standard.
10.5. Irreparable injury. You acknowledge that any failure to comply with the requirements of this Section 10 will cause us irreparable injury, and you agree to pay all court costs and reasonable attorneys' fees incurred by us in obtaining specific performance of, or an injunction against violation of, the requirements of this Section 10, or such other relief sought by us.
10.6. Ideas and Concepts.
If you develop any ideas, concepts, methods, techniques or materials of improving posture, reducing back pain, improving physical well-being or that otherwise relate to the Gokhale Method ("Ideas and Concepts") during the Term of this Agreement, you agree to disclose those Ideas and Concepts to us and that we may use them, in our discretion, in improving or modifying the Gokhale Method, offer them to our Affiliates, other Franchisees or business partners without the need to obtain any prior approval from you, nor without any compensation to you.
What This Means (2024 FDD)
Based on the 2024 Gokhale Method Franchise Disclosure Document, there is no direct mention in Item 6 (Other Fees) of how the royalty fee structure relates to the franchisee's obligation to maintain the confidentiality of proprietary information as described in Item 14. Item 6 outlines various fees such as royalties, billing fees for students processed through the franchisor's billing facility (2.5 percent), Gokhale Active Premium membership fees ($140 per year), continuing education costs (estimated between $100 and $500), and promotional materials costs. These fees are primarily related to the operational and support aspects of the franchise.
Item 22 discusses confidentiality in the context of the franchise agreement. It states that included in Gokhale Method's confidential information are the Teachers' Manual, teaching scripts and Policy Statements; the information, know-how and techniques that they have imparted to you; proprietary software; and any other information they have provided to you that is not available to the general public. The franchisee acknowledges that failure to comply with the confidentiality requirements will cause irreparable injury to Gokhale Method, and agrees to pay all court costs and reasonable attorneys' fees incurred by them in obtaining specific performance of, or an injunction against violation of, the requirements of this Section 10, or such other relief sought by them.
While the FDD excerpts do not explicitly link royalty fees to confidentiality obligations, it is common in franchising that maintaining the confidentiality of proprietary information is a condition of the franchise agreement. Failure to do so could result in termination of the agreement and loss of the franchise, which would consequently impact the franchisee's ability to generate revenue and pay royalties. A prospective franchisee should inquire with Gokhale Method about any specific policies or procedures that tie royalty payments to the adherence of confidentiality agreements.