Does the confidentiality covenant in Section 18.2 survive the termination of the Kidokinetics Franchise Agreement?

According to Kidokinetics's 2024 Franchise Disclosure Document, the confidentiality covenant outlined in Section 18.2 of the franchise agreement does indeed survive the expiration, termination, or transfer of the agreement. This covenant remains perpetually binding on the franchisee and each principal involved. This means that even after the franchise agreement ends, the franchisee and its principals are still legally obligated to maintain the confidentiality of certain information.

The confidential information includes items such as customer lists (names, addresses, credit information, purchasing histories, and rates), as well as supplier information and purchasing arrangements. The franchisee and its principals are prohibited from communicating, divulging, or using this confidential information for the benefit of any other person or entity, even after the agreement's termination. They are also barred from using any confidential information they gained during the operation of the Kidokinetics business for their own benefit.

This perpetual obligation to protect confidential information is a significant consideration for prospective Kidokinetics franchisees. It means that the knowledge and data acquired during the franchise term cannot be used to start a competing business or to benefit another business, potentially limiting future opportunities. Franchisees must also take necessary steps to protect this information and notify Kidokinetics if any confidential information is divulged in violation of the agreement. This enduring confidentiality requirement is common in franchising to protect the franchisor's proprietary information and maintain a competitive advantage.