Must I provide Hyper Kidz with copies of the signed confidentiality agreements from my Principals and employees?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
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 are required to have their Principals and employees sign confidentiality and non-competition agreements in a form prescribed by Hyper Kidz. Furthermore, at Hyper Kidz's request, franchisees must provide them with signed copies of these agreements. Hyper Kidz is considered a third-party beneficiary of these agreements and has the independent right to enforce their terms.
This requirement ensures that Hyper Kidz can protect its confidential information and trade secrets, which are crucial for maintaining the brand's competitive edge and operational standards. By mandating these agreements, Hyper Kidz aims to prevent unauthorized use or disclosure of sensitive information by anyone associated with the franchise.
For a prospective Hyper Kidz franchisee, this means they must implement a system for managing and securing these signed agreements. They should also be prepared to promptly provide copies to Hyper Kidz upon request. Failure to comply with this requirement could potentially lead to breaches of the franchise agreement and possible legal repercussions, given Hyper Kidz's right to enforce these agreements as a third-party beneficiary.