In the event of unauthorized disclosure of Proprietary Software by a Kidokinetics franchisee's employee, agent, or representative, what action must the franchisee take?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
You agree: (i) you will not use the Intellectual Property in any business or capacity other than for the benefit of the Kidokinetics Business operated by Franchisee or in any way detrimental to us or to the Franchisee; (ii) you will maintain the confidentiality of the Intellectual Property at all times; (iii) you will not make unauthorized copies of documents containing any Intellectual Property; (iv) you will take such reasonable steps as we may ask of you from time to time to prevent unauthorized use or disclosure of the Intellectual Property; and (v) you will stop using the Intellectual Property immediately if you are no longer an employee, independent contractor, agent, representative, or supplier of Franchisee.
Franchisee is required to participate in any System-wide computer network, intranet system, or extranet system that Franchisor implements and may be required by Franchisor to use such computer network, intranet system, or extranet system to, among other things: (i) submit Franchisee's reports due under this Agreement to Franchisor online; (ii) view and print portions of the Franchise Operations Manual, including any updates or modifications thereto; (iii) download approved local advertising materials; (iv) communicate with Franchisor and other System franchisees; and (v) to complete any initial or ongoing training.
Franchisee agrees to use the facilities of any such computer network, intranet system or extranet system in strict compliance with the standards, protocols, and restrictions that Franchisor included in the Franchise Operations Manual, including those related to the encryption of confidential information and prohibitions against the transmission of libelous, derogatory or defamatory statements.
physical access or access via computer or telecommunications networks or otherwise, and report the theft or loss of the Franchise Operations Manual, or any portion thereof, immediately to Franchisor. At a minimum, Franchisee shall, in the case of computer and telecommunications networks, use the latest available firewall and similar technology to prevent unauthorized access.
Franchisee and Franchisee's principals agree to indemnify, defend and hold Franchisor, its affiliates, and its respective members, directors, officers, employees, agents, partners, shareholders, agents, contractors, successors, assignees, personal representatives, heirs and legatees of all these persons or entities ("Indemnitees") harmless to the fullest extent permitted by law, from and against and to reimburse them for all claims, obligations, liabilities and damages ("Claims"), including any and all taxes, directly or indirectly arising out of, in whole or in part: (a) the operation of Franchisee's Kidokinetics Business, and Franchisee's advertising; (b) the use of the Marks and other Confidential Information
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, franchisees must take several actions to protect the franchisor's proprietary information. Franchisees must take reasonable steps to prevent unauthorized use or disclosure of intellectual property. This includes ensuring that employees, agents, and representatives only use the intellectual property for the benefit of the Kidokinetics business and maintain its confidentiality. Franchisees must also prevent unauthorized copying of documents containing intellectual property.
Kidokinetics franchisees are required to participate in any system-wide computer network and must use it in strict compliance with the standards in the Franchise Operations Manual. These standards include those related to the encryption of confidential information and prohibitions against the transmission of libelous, derogatory, or defamatory statements. Franchisees must also maintain adequate hardware and software to access the internet at the speed required by Kidokinetics and maintain an acceptable electronic mail account, reading all emails related to the Kidokinetics business daily.
In the event of a breach, the franchisee is obligated to report the theft or loss of the Franchise Operations Manual immediately to Kidokinetics. At a minimum, the franchisee must use the latest available firewall and similar technology to prevent unauthorized access to computer and telecommunications networks. Additionally, the franchisee is required to indemnify, defend, and hold Kidokinetics harmless from any claims arising out of the use of the Marks and other Confidential Information.