What are my obligations regarding the confidentiality of Hyper Kidz information after the Franchise Agreement terminates?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
rmation to your Principals and employees only to the extent reasonably necessary to operate your Franchised Business.
You and your Principals must acknowledge and agree that the Confidential Information is confidential to and a valuable asset of us and our affiliates, is proprietary, includes trade secrets of us and our affiliates and is disclosed to you on the condition that you, your Principals and your employees who have access to the Confidential Information agree that during and after the term of the agreement you: (1) will not use the Confidential Information in any other business or capacity; (2) will maintain the absolute confidentiality of the Confidential Information; (3) will not make unauthorized copies of any portion of the Confidential Information disclosed in written or other tangible form; (4) will adopt and implement all reasonable procedures we prescribe to prevent unauthorized use or disclosure of the Confidential Information; and (5) will require all Principals and all employees who have access to the Confidential Information to sign confidentiality and non-competition agreements in the form we prescribe and provide us, at our request, with signed copies of each agreement. We will be a third-party beneficiary of these agreements with the independent right to enforce their terms.
Nothing contained in the Franchise Agreement will be construed to prohibit you from using the Confidential Information in connection with the operation of other Hyper Kidz Businesses under valid Franchise Agreements with us.
If you have obtained our prior written consent, the restrictions on the disclosure and use of the Confidential Information shall not apply to the following: (a) information, methods, procedures, techniques and knowledge which are or become generally known in the indoor recreation business within the Designated Territory, other than through deliberate or inadvertent disclosure by you; and (b) the disclosure of the Confidential Information in judicial or administrative proceedings if you are legally compelled to disclose this information, provided you have notified us in writing before disclosure and used your best efforts to obtain, and afforded us the opportunity to obtain, an appropriate protective order or other assurance satisfactory to us of confidential treatment for the information required to be disclosed.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 38–40)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, franchisees and their Principals must maintain the confidentiality of Hyper Kidz's Confidential Information both during and after the term of the Franchise Agreement. This obligation includes not using the Confidential Information in any other business or capacity and maintaining its absolute confidentiality. Franchisees must also refrain from making unauthorized copies of any Confidential Information disclosed in written or tangible form and must implement reasonable procedures to prevent unauthorized use or disclosure as prescribed by Hyper Kidz.
Furthermore, franchisees are required to have all Principals and employees who have access to the Confidential Information sign confidentiality and non-competition agreements in a form prescribed by Hyper Kidz. Signed copies of these agreements must be provided to Hyper Kidz upon request, and Hyper Kidz is considered a third-party beneficiary with the right to enforce these agreements. These measures ensure that the Confidential Information remains protected even after an employee leaves or the franchise agreement is terminated.
There are limited exceptions to these confidentiality obligations. If Hyper Kidz provides prior written consent, the restrictions do not apply to information that becomes generally known in the indoor recreation business within the Designated Territory, unless the franchisee deliberately or inadvertently disclosed it. Additionally, disclosure of Confidential Information is permitted in judicial or administrative proceedings if legally compelled, provided that Hyper Kidz is notified in writing beforehand and given the opportunity to obtain a protective order or other assurance of confidential treatment. This ensures franchisees can comply with legal requirements while still protecting Hyper Kidz's Confidential Information to the greatest extent possible.