What are the consequences if a Hydrodog franchisee violates the Confidentiality Obligations?

others to do so, any mobile, fixed, or internet or catalog based business or facility that provides pet grooming, pet care, pet products or services, or any other pet-related products and services that are identical, similar to, competitive with, or substitutable for the Products and Services offered by HydroDog Businesses, whether now existing or hereafter developed, excluding any HydroDog Business under a franchise agreement with us, or any other business that we, at our sole discretion, determine to be competitive.

• 1. Confidential Information You will not acquire any interest in the Confidential Information. The use or duplication of any Confidential Information in any other business will constitute an unfair method of competition. You will not disclose, leak, divulge, disseminate, reveal, make available, replicate, duplicate (in any form, tangible or intangible) or otherwise communicate all or any portion of the Confidential Information to any other person or entity, or use it for any purpose other than while you are working with us at the Business under a Franchise Agreement with Franchisor, either directly or indirectly. You will use the highest degree of care to safeguard the confidentiality of the Confidential Information and not make any copies of the Confidential Information (printed or an intangible form). You will follow all reasonable procedures we or the Franchisor may prescribe from time to time to prevent unauthorized use or disclosure of the Confidential Information (collectively, the "Confidentiality Obligations").
• 1. Liquidated Damages. You acknowledge that the Franchisor would suffer substantial damages if you violated the Competitive Restriction set forth in Section 2 above. You acknowledge that that such damages are difficult to estimate accurately and proof of such damages would be burdensome and costly, although such damages are real and meaningful. Therefore, in the event that you violate any of the Competitive Restriction set forth in this Agreement, within 15 calendar days of such violation, you will pay us partial liquidated damages in the amount of our then-current initial franchise fee ("Competitive Liquidated Damages"). You agree that Competitive Liquidated Damages as calculated under this Section represent the best estimate the Franchisor would suffer for its costs and expenses of investigation and its internal non-legal costs to prepare to enforce its rights if you were to violate the Competitive Restriction set forth in this Agreement. Your payment of the Competitive Liquidated Damages will not be considered a penalty, but instead a reasonable estimate of fair compensation to the Franchisor for some of, but not all of, the damages, costs and expenses it will incur if you violate the Competitive Restriction. The Franchisor is also be entitled to recover all costs, including attorneys' fees incurred in connection with collection of Liquidated Damages as well as enforcing its rights. Without limiting the foregoing, the Competitive Liquidated Damages will not be the Franchisor's exclusive remedy, will not prevent us from seeking other actual or consequential damages, injunctive relief enjoining future violations of the Competitive Restriction, nor will it in any way limit the Franchisor' right to assert that we have no adequate remedy at law in the event of breach.

• 1. Severability and Substitution. You acknowledge and agree that these competitive restrictions will not unreasonably deprive you of your ability to earn a living or engage other business activities. You and we agree that: (a) the time period, geographic area, and scope of the competitive restrictions contained in this Agreement are reasonably necessary to protect our localized efforts and the Franchisor's efforts to develop HydroDog Businesses throughout the U.S.;

Source: Item 23 — RECEIPTS (FDD pages 43–166)