Is a Hydrodog franchisee required to implement procedures to prevent unauthorized use or disclosure of confidential information?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) will adopt and implement all reasonable procedures that we periodically prescribe to prevent unauthorized use or disclosure of Confidential Information, including, without limitation, restricting its disclosure to Franchised Business personnel and others needing to know such Confidential Information to operate your HydroDog Business, and requiring all employees and independent contractors having access to Confidential Information to sign confidentiality and non-competition agreements in a form acceptable to us. We have the right to regulate the form of confidentiality and non-competition agreement that you use and to be a third-party beneficiary of that agreement with independent enforcement rights.
You must disclose to us all ideas, techniques, services and products concerning the development and operation of your HydroDog Business that you or your employees conceive or develop during the term of this Agreement. You must grant to us and agree to obtain from your owners, employees, contractors, and agents a perpetual, irrevocable, royalty-free, non-exclusive, transferable, and worldwide right to use, modify, exploit, and sublicense these ideas, techniques, innovations, improvements and products concerning the development and operation of Franchised Business that you or your employees, contractors, or agents conceive or develop during the term of this Agreement in all pet-related product and service businesses. We will have no obligation to make any lump sum or on-going payments to you with respect to any idea, concept, method, technique or product. You must agree that you will not use nor will you allow any other person or entity to use any of these ideas, techniques or products without obtaining our prior written approval. Such ideas, techniques, services and products will be deemed to be our sole and exclusive property, part of the System, and works made-for-hire for us. To the extent any item does not qualify as a "work made-for-hire" for us, by this paragraph you assign ownership of that item, and all related rights to that item, to us and agree to sign whatever assignment or other documents we request to evidence our ownership or to help us obtain intellectual property rights in the item.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees are required to adopt and implement procedures to prevent unauthorized use or disclosure of confidential information. Hydrodog periodically prescribes these procedures, which include restricting disclosure of confidential information to personnel who need it to operate the HydroDog Business. Franchisees must also ensure that all employees and independent contractors with access to confidential information sign confidentiality and non-competition agreements in a form acceptable to Hydrodog. Hydrodog retains the right to regulate the form of these agreements and to be a third-party beneficiary with independent enforcement rights.
Hydrodog also mandates that franchisees disclose all ideas, techniques, services, and products concerning the development and operation of their HydroDog Business that they or their employees conceive or develop during the term of the Franchise Agreement. Franchisees must grant Hydrodog a perpetual, irrevocable, royalty-free, non-exclusive, transferable, and worldwide right to use, modify, exploit, and sublicense these innovations in all pet-related product and service businesses. Hydrodog has no obligation to provide any payment for these ideas or products, and the franchisee cannot use or allow others to use these ideas without Hydrodog's prior written approval. These innovations become Hydrodog's sole and exclusive property and part of the Hydrodog system.
These measures are typical in franchising to protect the brand's proprietary information and maintain a competitive advantage. By implementing these procedures, Hydrodog aims to safeguard its confidential information, which includes methods, systems, client communication programs, the System itself, plans, designs, training methods, and knowledge of operating results. Franchisees must adhere to these confidentiality obligations both during and after the term of the Franchise Agreement.