Under what circumstances can a Ledgers franchisee retain Confidential Information after termination or expiration?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon Termination or Expiration of this Agreement, you must destroy any Confidential Information stored in printed or digital form within ten (10) days and provide us with a written certification of destruction. However, you may retain Confidential Information as needed solely for legal, tax, and insurance purposes, but the information retained will remain subject at all times to the confidentiality restrictions of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, a franchisee must generally destroy all Confidential Information in printed or digital form within ten days of the termination or expiration of the franchise agreement. The franchisee must also provide Ledgers with written certification of this destruction.
However, there is an exception. A Ledgers franchisee may retain Confidential Information if it is needed solely for legal, tax, and insurance purposes. Even when retained for these specific reasons, the information remains subject to the confidentiality restrictions outlined in the franchise agreement. This means the franchisee cannot use the information for any purpose other than those stated (legal, tax, and insurance) and must continue to protect its confidentiality.
This clause is fairly standard in franchise agreements. It balances the franchisor's need to protect proprietary information with the franchisee's need to retain records for compliance purposes. A prospective Ledgers franchisee should carefully consider what information might be needed for these purposes and ensure they understand the ongoing confidentiality obligations even after the franchise relationship ends.