Does the confidentiality obligation for Hydrodog's Confidential Information continue after the termination of the franchise agreement?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.2 Restriction on Use of Confidential Information. You acknowledge and agree that you will not acquire any interest in Confidential Information, other than the right to use certain Confidential Information in operating your HydroDog Business during this Agreement's term and according to this Agreement's terms and conditions, and that your use of any Confidential Information for any purpose not expressly authorized by this Agreement would constitute an unfair method of competition with us and our franchisees and may violate certain laws. You further acknowledge and agree that the Confidential Information is proprietary, includes our trade secrets, and is disclosed to you only on the condition that you, your Owners, managers, employees and/or independent contractors who have access to it agree, and they do agree, that you and they:
- (a) Will not use any Confidential Information in any other business or capacity;
- (b) Will keep the Confidential Information strictly confidential during and indefinitely after this Agreement's term;
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the confidentiality obligations regarding Hydrodog's confidential information extend beyond the termination of the franchise agreement. Franchisees must keep the Confidential Information strictly confidential during and indefinitely after the agreement's term. This means that even after a franchisee's relationship with Hydrodog ends, they are still legally bound to protect and not disclose any confidential information they gained during their time as a franchisee.
This indefinite confidentiality obligation has significant implications for prospective Hydrodog franchisees. It means that the knowledge and information acquired while operating a Hydrodog franchise cannot be used in any competing business or disclosed to others, even after the franchise agreement expires or is terminated. This restriction is designed to protect Hydrodog's trade secrets and proprietary information, ensuring that former franchisees do not use this knowledge to unfairly compete with the company or its other franchisees.
The FDD also states that the client database is included in the confidential information and is Hydrodog's property. Franchisees cannot disclose, sell, assign, transfer, or convey the client database to any person other than Hydrodog, either during the term of the agreement or thereafter. A breach of this section can result in immediate termination of the agreement. This further emphasizes the importance Hydrodog places on protecting its confidential information and the serious consequences for franchisees who violate these obligations.
In addition to the indefinite confidentiality obligations, Hydrodog franchisees also face competitive restrictions for a period of two years after termination or expiration of the agreement. These restrictions prevent former franchisees from engaging in any competitive business within a specified territory. The combination of these confidentiality and competitive restrictions highlights the importance of carefully considering the long-term implications of entering into a franchise agreement with Hydrodog.