What is the definition of 'Confidential Materials' in the context of the Gold Star franchise agreement termination?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
12. CONFIDENTIALITY.
- 12.1 Confidential Material.
Information contained in the Manual, and other information about the Proprietary Products, the System and the Business, including customer and supplier lists (the "Confidential Material") are proprietary, highly-confidential trade secrets and FRANCHISEE shall not use any such Confidential Material except as necessary in the operation of the Business in accordance with this Agreement.
FRANCHISEE further acknowledges and agrees that the COMPANY is the owner of all rights in and to the System, and the Confidential Material, and that the System and the Confidential Material constitute trade secrets of the COMPANY which are revealed to FRANCHISEE in confidence, and that no right is given to or acquired by FRANCHISEE to, and FRANCHISEE shall not, disclose, duplicate, license, sell or reveal any of such Confidential Material to any person, other than disclosure to an employee of FRANCHISEE to the extent required by his/her work in accordance with this Agreement to be familiar with relevant Confidential Material.
FRANCHISEE agrees to keep confidential such Confidential Material, and, upon the COMPANY's request, to obtain from each of the Related Parties an agreement to keep the Confidential Materials confidential and not to use the Confidential Materials except as necessary in the operation of the Business.
FRANCHISEE will advise the COMPANY promptly in writing if FRANCHISEE learns of any claims made relating to or unauthorized use of any Confidential Material whether by a Related Party or a third party.
The COMPANY is not obligated to take any action but may take any action it deems appropriate.
FRANCHISEE also agrees not to contest or aid in contesting, directly or indirectly, the COMPANY's right, title, ownership or interest in or to, or the validity or enforceability of, any copyrights, Confidential Material or the System, or contest the COMPANY's sole right to register, use or franchise or license others to use any such copyrights, the System or the Confidential Material, during or after the term of this Agreement or any extension or renewal thereof.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Confidential Material is defined within the franchise agreement as proprietary and highly confidential trade secrets. This includes information contained in the Manual, as well as other information about the Proprietary Products, the System, and the Business. The definition specifically includes customer and supplier lists.
Gold Star franchisees are explicitly prohibited from using any Confidential Material except when necessary to operate the Business in accordance with the Franchise Agreement. Gold Star retains ownership of all rights to the System and the Confidential Material, which are considered trade secrets revealed to the franchisee in confidence. Franchisees are not allowed to disclose, duplicate, license, sell, or reveal any Confidential Material to any person, except to their employees who need the information to perform their work under the agreement.
Franchisees must keep the Confidential Material confidential and, if requested by Gold Star, obtain agreements from related parties (presumably employees or others with access) to maintain confidentiality and use the materials only for business operations. Franchisees are also required to promptly inform Gold Star in writing if they become aware of any claims or unauthorized use of Confidential Material, whether by a related party or a third party. Gold Star, however, is not obligated to take any action but may take any action it deems appropriate.
Furthermore, franchisees agree not to contest or assist in contesting Gold Star's rights, title, ownership, or interest in the copyrights, Confidential Material, or the System. This includes refraining from contesting Gold Star's right to register, use, or franchise others to use these elements, both during and after the term of the Franchise Agreement. This clause ensures the protection of Gold Star's intellectual property and trade secrets, which are vital to maintaining the brand's competitive advantage and consistency across all franchise locations.