What degree of care must a Hydrodog franchisee use to safeguard the confidentiality of the Confidential Information?

According to Hydrodog's 2025 Franchise Disclosure Document, a franchisee must use the highest degree of care to safeguard the confidentiality of the Confidential Information. This includes not making any copies of the Confidential Information, whether in printed or intangible form. The franchisee is also obligated to follow all reasonable procedures prescribed by Hydrodog to prevent unauthorized use or disclosure of the Confidential Information. These obligations are collectively referred to as the "Confidentiality Obligations."

This requirement means that a Hydrodog franchisee must take proactive steps to protect sensitive information related to the Hydrodog business. This could involve implementing security measures to protect digital data, restricting access to confidential documents, and training employees on confidentiality protocols. The franchisee's responsibility extends to preventing not only intentional disclosures but also unintentional leaks of confidential information.

Failure to comply with these confidentiality obligations could have serious consequences for a Hydrodog franchisee. The FDD states that the use or duplication of any Confidential Information in any other business will constitute an unfair method of competition. While the document mentions liquidated damages for violating competitive restrictions, it does not specify the damages for violating confidentiality obligations. A breach of confidentiality could potentially lead to legal action from Hydrodog, including termination of the franchise agreement as stated in section 9.3 regarding the client database.