Can a Kidokinetics franchisee communicate or divulge trade secrets to any other person or entity during the term of the agreement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Neither Franchisee nor any Principal may, during the term of this Agreement or following the expiration or termination of the Agreement, communicate or divulge to, or use for the benefit of, any other person or entity.
Following the expiration or termination of this Agreement, Franchisee or any Principal shall not use for their own benefit, any Confidential Information that may be communicated to Franchisee or any Principal or of which Franchisee or any Principal may be apprised in connection with the operation of the Kidokinetics Business under the terms of this Agreement.
Franchisee and any Principal shall not divulge and make any Confidential Information available to anyone other than those of Franchisee's employees who require the Confidential Information to operate the Kidokinetics Business.
Franchisee and any Principal shall not at any time copy, duplicate, record or otherwise reproduce any Confidential Information, in whole or in part, or otherwise make the same available to any person other than those authorized above, without Franchisor's prior written consent.
The covenant in this Section 18.2 will survive the expiration, termination or transfer of this Agreement or any interest in the Agreement and be perpetually binding upon Franchisee and each Principal.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees and their principals are prohibited from communicating or divulging trade secrets and confidential information to any other person or entity during the term of the Franchise Agreement. This restriction extends to using such information for the benefit of another person or entity. However, franchisees can share confidential information with their employees who need it to operate the Kidokinetics business.
Kidokinetics defines confidential information broadly, including methods, processes, customer lists, vendor partnerships, sales and technical information, costs, service prices, software tools, website design, products, services, equipment, technologies, systems of operation, programs, procedures, policies, standards, techniques, requirements, specifications, the Franchise Operations Manual, advertising methods, instructional materials, marketing plans, business methods, research, development, know-how, and components of the System. This information is considered confidential whether or not it is specifically designated as such or is protected by patent, copyright, trade secret, or other proprietary rights.
Franchisees must take necessary steps to protect confidential information and immediately notify Kidokinetics if they discover any unauthorized disclosure. They are also prohibited from copying, duplicating, recording, or reproducing any confidential information without prior written consent from Kidokinetics. These non-disclosure covenants survive the termination or transfer of the Franchise Agreement, remaining perpetually binding on the franchisee and their principals.
This stringent protection of trade secrets and confidential information is typical in franchising to maintain the brand's competitive advantage and operational consistency. Prospective Kidokinetics franchisees should understand the breadth of information considered confidential and the measures required to protect it, as violations could lead to legal repercussions.