Under what circumstances is an Itan franchisee's obligation to maintain confidentiality waived if information becomes publicly available?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Confidential Information does not include information that: (a) is now, or subsequently becomes, generally available to the public (except as a result of a breach of confidentiality obligations by you, Franchisee or Franchisee's owners, employees or other constituents); (b) you can demonstrate was rightfully in your possession, without obligation of nondisclosure, before we (or any person associated with us) or Franchisee (or any person associated with Franchisee) disclosed the information to you; (c) is independently developed by you without any use of, or reference to, any Confidential Information; or (d) is rightfully obtained from a third party who has the right to transfer or disclose the information to you without breaching a confidentiality covenant imposed on such third party.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, an Itan franchisee's obligation to maintain confidentiality is waived under specific conditions related to the public availability of information. Confidential Information does not include information that is generally available to the public. However, this waiver does not apply if the information became public due to a breach of confidentiality obligations by the franchisee, their owners, employees, or other constituents.
In practical terms, this means that an Itan franchisee is not required to keep information confidential if it is already widely known. However, if the franchisee or someone associated with them is responsible for the information becoming public, they are still bound by the confidentiality agreement. This provision protects Itan by ensuring that franchisees cannot disclose confidential information and then claim it is no longer confidential because it is now public.
This type of clause is standard in franchise agreements to protect the franchisor's proprietary information. It is important for a prospective Itan franchisee to understand that they have a continuing obligation to protect confidential information and cannot circumvent this obligation by disclosing the information themselves or through their employees and then claiming it is now public knowledge. The franchisee should take appropriate steps to ensure that confidential information remains secure and is not disclosed to unauthorized parties.