Does Hydrodog have the right to regulate the form of the confidentiality and non-competition agreement used by Hydrodog franchisees?
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.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, Hydrodog has the right to regulate the form of confidentiality and non-competition agreements that franchisees use. Hydrodog can also be a third-party beneficiary of these agreements, giving them independent enforcement rights. This means that Hydrodog can dictate the specific terms and conditions of these agreements to ensure consistency and protect its interests.
For a prospective Hydrodog franchisee, this implies that they must use the confidentiality and non-competition agreements provided or approved by Hydrodog for their employees and independent contractors. They cannot use their own versions or modify the approved forms without Hydrodog's consent. This requirement helps Hydrodog maintain control over its confidential information and protect its competitive advantage.
The franchisee is responsible for ensuring that all personnel who have access to Hydrodog's confidential information sign these agreements. This includes employees and independent contractors. Failure to comply with this requirement could result in a breach of the franchise agreement and potential legal consequences. Franchisees should carefully review the approved forms and understand their obligations regarding confidentiality and non-competition.
This level of control over confidentiality and non-competition agreements is common in franchising, as franchisors need to protect their trade secrets, customer relationships, and overall business model. By standardizing these agreements, Hydrodog aims to create a uniform system and prevent unauthorized use or disclosure of its confidential information.