What right does a Healthsource Chiropractic franchisee have regarding the Confidential Information?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates have developed proprietary confidential information comprising methods, techniques, procedures, information, systems, and knowledge of and experience in the design and operation of HealthSource Chiropractic franchises, including but not limited to (1) services and products offered and sold at HealthSource Chiropractic franchises and knowledge of sales and profit performance of any one or more HealthSource Chiropractic franchises; (2) sources of products sold from HealthSource Chiropractic franchises; (3) advertising and promotional programs and image and decor; (4) HealthSource Chiropractic franchise image and decor; (5) methods, techniques, formats, specifications, procedures, information, systems and knowledge of and experience in the development, operation, and franchising of HealthSource Chiropractic franchises; (6) copyrighted or copyrightable materials, including, without limitation, office forms and procedures, training, promotional, and marketing materials, telephone scripts and the content of the Operations Manual and other works of authorship under or in connection with the operation of the System; and (7) the methods of training employees (collectively, the "Confidential Information"). We will disclose the Confidential Information to you in the initial training program described in Item 11, the Operations Manual lent to you, and guidance furnished to you during the term of your franchise. You will not acquire any interest in the Confidential Information other than the right to use it in the development and operation of your franchise during the term of the franchise.
The Confidential Information is proprietary, and, except to the extent that it is or becomes generally known in the industry or trade, is our trade secret, and is disclosed to you solely for your use in the operation of your franchise during the term of the franchise. You (1) must not use, directly or indirectly, the Confidential Information in any other business or capacity or for any purpose other than as needed in the development or operation of your franchise during the term of the franchise; (2) must maintain the confidentiality of the Confidential Information during and after the term of the franchise and not directly or indirectly publish or otherwise disclose it to any third party; (3) must not make unauthorized copies of any portion of the Confidential Information disclosed in written form or another form or media; and (4) must adopt and implement all reasonable procedures, including any that we may prescribe periodically, to prevent the unauthorized use or disclosure of any of the Confidential Information, including restrictions on disclosure to your employees and the use of nondisclosure clauses in employment agreements with your employees.
Source: Item 14 — Patents, Copyrights, and Proprietary Information (FDD pages 50–51)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, franchisees are granted a limited right to use the Confidential Information solely for the development and operation of their franchise during the term of the franchise agreement. This Confidential Information, which includes methods, techniques, procedures, systems, and knowledge related to the operation of HealthSource Chiropractic franchises, is disclosed to the franchisee through initial training, the Operations Manual, and ongoing guidance. Franchisees do not acquire any ownership or other interest in the Confidential Information beyond this specific usage right.
The FDD emphasizes that the Confidential Information remains the proprietary trade secret of Healthsource Chiropractic, except for information that becomes generally known in the industry. Franchisees are explicitly prohibited from using the Confidential Information in any other business or capacity, or for any purpose outside the scope of their franchise operation. They must maintain the confidentiality of this information both during and after the franchise term, and are not allowed to disclose it to any third party.
Healthsource Chiropractic franchisees are also restricted from making unauthorized copies of the Confidential Information and must implement reasonable procedures to prevent its unauthorized use or disclosure. This includes imposing restrictions on disclosure to employees and using non-disclosure clauses in employment agreements. These measures are designed to protect the proprietary information and maintain the competitive advantage of the Healthsource Chiropractic system.
In summary, while Healthsource Chiropractic franchisees are given access to valuable Confidential Information necessary to run their business, their rights are strictly limited to using it within the scope of their franchise agreement. They have an obligation to protect this information and prevent its misuse, both during and after the term of the franchise.