What is the Gold Star franchisee's obligation regarding confidentiality agreements from Related Parties?

According to the 2025 Gold Star Franchise Disclosure Document, franchisees have specific obligations regarding confidentiality agreements with related parties. Gold Star requires franchisees to keep confidential all Confidential Material, which includes information in the Manual and other information about Proprietary Products, the System, and the Business, including customer and supplier lists. Upon Gold Star's request, the franchisee must obtain an agreement from each of the Related Parties to keep the Confidential Materials confidential and to only use them as necessary for the business's operation.

This requirement ensures that sensitive business information remains protected. Related Parties are not defined in the excerpt, so a prospective franchisee should clarify with Gold Star who qualifies as a Related Party. This could include family members, business partners, or investors involved with the franchisee.

If a franchisee fails to secure these confidentiality agreements or if a Related Party breaches confidentiality due to the franchisee's failure to take necessary precautions, the franchisee may be liable to Gold Star for $100,000 as liquidated damages for each breach. This substantial penalty underscores the importance Gold Star places on maintaining the confidentiality of its proprietary information and trade secrets. Franchisees must, therefore, diligently manage and monitor the confidentiality practices of all Related Parties to avoid potential financial repercussions and legal action from Gold Star.