Is a Gold Star franchisee allowed to sell the confidential material?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, franchisees are explicitly prohibited from selling confidential material related to the Gold Star business. The FDD defines "Confidential Material" as information contained in the Manual, information about Proprietary Products, the System, and the Business, including customer and supplier lists. Gold Star considers these materials proprietary and highly confidential trade secrets.
The franchise agreement states that franchisees can only use Confidential Material as necessary for operating the business according to the agreement. Franchisees acknowledge that Gold Star owns all rights to the System and Confidential Material, which constitute trade secrets revealed in confidence. Franchisees are not allowed to disclose, duplicate, license, sell, or reveal any Confidential Material to any person. The only exception is disclosure to an employee who needs to be familiar with the material for their work, as outlined in the agreement.
Gold Star franchisees must keep the Confidential Material private and, if requested by Gold Star, obtain agreements from related parties to maintain confidentiality and use the materials only for business operations. Franchisees are required to promptly inform Gold Star in writing if they become aware of any unauthorized use of Confidential Material by a related party or a third party. Furthermore, franchisees agree not to contest Gold Star's rights to the Confidential Material during or after the franchise term.