Is a Ledgers franchisee prohibited from using Confidential Information for the benefit of any other person or business during the initial term of the Franchise Agreement?

According to Ledgers's 2025 Franchise Disclosure Document, franchisees are prohibited from using confidential information for the benefit of another person or business during the initial term of the Franchise Agreement. The FDD states that franchisees may never reveal any of Ledgers's confidential information to any other person or entity or use it for the benefit of any other person or business during the initial term, any renewal term, or after the Franchise Agreement expires or is terminated.

Confidential Information is defined as non-public sensitive or proprietary material related to the Ledgers Franchise System, the relationship between Ledgers and the franchisee, or the Franchise Business, whether provided orally or in writing. This includes client lists, performance data, and reports from the Franchise System, along with any notes, summaries, or other derivative works. Customer data, including names, telephone numbers, addresses, and email addresses, is also considered Confidential Information.

This restriction is a standard practice in franchising to protect the franchisor's proprietary information and maintain a competitive advantage. Franchisees should be aware that this obligation extends beyond the termination of the franchise agreement, meaning that they cannot use Ledgers's confidential information to start a competing business even after their franchise agreement has ended. Franchisees are also responsible for storing Confidential Information securely, whether physically or electronically, and must follow all regulatory and legal requirements for the protection of consumer data and tax preparer data.