What precautions must each party take to safeguard the confidentiality of the other party's Confidential Information under the Healthsource Chiropractic agreement?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
acknowledges and agrees that: (a) the Confidential Information constitutes valuable trade secrets of the party owning such Confidential Information; (b) it will use Confidential Information solely in accordance with the provisions of this Agreement; and c) it will not disclose, or permit to be disclosed, the Confidential Information of the other party to any Third-Party without the disclosing party's prior written consent. Each party will take all reasonable precautions necessary to safeguard the confidentiality of the other party's Confidential Information including, at a minimum, those precautions taken by a party to protect its own Confidential Information, which will in no event be less than a reasonable degree of care. Confidential Information will not include information that is: (a) publicly available;
- (b) already in the other party's possession and not subject to a confidentiality obligation;
- (c) obtained by the other party from any source without any obligation of confidentiality;
- (d) independently developed by the other party without reference to the disclosing party's Confidential Information; or (e) required to be disclosed by order of a court or other governmental entity; provided no less than ten (10) days written notice is given to the party owning such Confidential Information so that such party may obtain a protective order or other equitable relief.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, both parties must take reasonable precautions to protect each other's confidential information. These precautions must be, at a minimum, as diligent as those each party uses to protect their own confidential information, but in no event less than a reasonable degree of care. This means franchisees must actively work to prevent unauthorized access or disclosure of sensitive information.
Specifically, the franchisee agrees to use confidential information solely as permitted by the agreement and not to disclose it to any third party without prior written consent. There are exceptions; confidential information excludes data that is already public, already in the receiving party's possession without confidentiality obligations, obtained from another source without confidentiality obligations, independently developed, or required to be disclosed by law or court order, provided that the owning party receives ten days written notice to seek protective action.
For a prospective Healthsource Chiropractic franchisee, this means understanding what constitutes confidential information and implementing appropriate safeguards. This includes securing physical documents, protecting digital data, and training employees on confidentiality obligations. Failure to adequately protect confidential information could lead to legal repercussions and damage the Healthsource Chiropractic brand. Franchisees should consult with legal counsel to ensure they fully understand their obligations and implement appropriate safeguards.