What is the consideration for signing the Confidentiality and Non-Competition Agreement for Hyper Kidz?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
Works and/or for you to use one or more additional or substitute copyrighted or copyrightable items, you agree to immediately comply with our directions to modify or otherwise discontinue the use of the copyrighted materials and/or to use one or more substitute materials.
ARTICLE 8: CONFIDENTIAL INFORMATION
8.1 Definition of "Confidential Information"
We possess and will further develop and acquire "Confidential Information" including, but not limited to, the following categories of information, methods, techniques, procedures, and knowledge developed or to be developed by us, our Affiliates and/or franchisees:
- (a) methods, techniques, specifications, standards, policies, procedures, information, concepts and systems relating to and knowledge of and experience in the development, operation, and franchising of Hyper Kidz Businesses;
- (b) marketing and promotional programs for Hyper Kidz Businesses;
- (c) knowledge of specifications for and knowledge of suppliers of certain materials, equipment and fixtures for Hyper Kidz Businesses;
- (d) the terms of this Agreement;
- (e) the Operations Manual; and
- (f) all data relating to the sales and operations of your Hyper Kidz Business.
8.2 Disclosure of Confidential Information
We will disclose such parts of the Confidential Information as are required for the operation of a Hyper Kidz Business to you during training and in guidance and assistance furnished to you during the term of this Agreement, and you may learn or otherwise obtain from us additional Confidential Information during the term of this Agreement. You acknowledge and agree that neither you nor any other person or entity will acquire any interest in or right to use the Confidential Information, other than your right to utilize it in the operation of the Hyper Kidz Business, and that the use or duplication of the Confidential Information in any other business would constitute an unfair method of competition with us and other Hyper Kidz Business franchisees. You agree to disclose the Confidential Information to your Principals and to employees of the Hyper Kidz Business only to the extent reasonably necessary for the operation of the Hyper Kidz Business.
8.3 Non-Disclosure of Confidential Information
You acknowledge and agree that the Confidential Information is confidential to us and a valuable asset of ours, is proprietary, includes our trade secrets, and is disclosed to you solely on the condition that you, your Principals and your employees who have access to it agree, and you do hereby agree, that during and after the term of this Agreement, you, your Principals and such employees:
- (a) will not use the Confidential Information in any other business or capacity;
- (b) will maintain the absolute secrecy and confidentiality of the Confidential Information;
- (c) will not make unauthorized copies of any portion of the Confidential Information disclosed in written or other tangible form;
- (d) will adopt and implement all reasonable procedures prescribed from time to time by us to prevent unauthorized use or disclosure of or access to the Confidential Information; and
- (e) will require all Principals and all employees and Principals who will have access to Confidential Information, including, without limitation, managers and other personnel who attend our training programs, to execute Confidentiality and Non-Competition Agreements in the form attached hereto as Attachment 9. We shall be a third-party beneficiary of such agreements with the independent right to enforce their terms. You shall provide, at our request, executed originals of each such Confidentiality and Non-Competition Agreement. Failure to procure execution of a Confidentiality and Non-Competition Agreement shall be a material breach of this Agreement.
8.4 Use of Confidential Information
Nothing contained herein shall be construed to prohibit you from using the Confidential Information in connection with the operation of a Hyper Kidz Business, provided such operation is pursuant to a valid franchise agreement between you and us.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, the primary consideration for signing the Confidentiality and Non-Competition Agreement is the franchisee's access to Hyper Kidz's confidential information, which is essential for operating a Hyper Kidz Business. This information includes methods, techniques, specifications, standards, policies, procedures, marketing programs, supplier knowledge, agreement terms, the Operations Manual, and sales and operations data. Hyper Kidz discloses this confidential information during training and ongoing support, enabling franchisees to effectively run their businesses.
By signing the agreement, franchisees, their principals, and employees acknowledge the confidential nature and value of this information. They agree to maintain its secrecy and use it solely for operating their Hyper Kidz Business. This prevents unfair competition and protects Hyper Kidz's trade secrets. Franchisees must also ensure that their personnel with access to confidential information also sign the agreement, with failure to do so constituting a breach of the franchise agreement.
The agreement outlines specific restrictions on using confidential information, including prohibitions against unauthorized copying, disclosure, or use in other businesses. These restrictions apply both during and after the franchise term. While franchisees can use the information to operate their Hyper Kidz Business under the franchise agreement, they cannot use it for any other purpose. This ensures that Hyper Kidz maintains control over its proprietary information and protects its competitive advantage.
In the event of a transfer of ownership, the agreement stipulates that the transferee and their personnel who will have access to confidential information must also sign the Confidentiality and Non-Competition Agreement and complete the training program. This ensures that the new owner is bound by the same confidentiality obligations as the original franchisee. Additionally, if the franchise agreement is terminated, the franchisee must immediately cease using any of Hyper Kidz's confidential information and return all confidential materials.