factual

What happens to the Trade Secrets of Management Recruiters upon expiration or termination of the Franchise Agreement?

Management_Recruiters Franchise · 2024 FDD

Answer from 2024 FDD Document

  • 16.1. Trade Secrets. Franchisee agrees that all Trade Secrets are and will remain the confidential and trade secret property of Franchisor. Upon expiration or termination of this Agreement for any reason, and as a condition precedent to receiving payment of any sums due from Franchisor upon such expiration or termination, Franchisee shall immediately return to Franchisor all material containing Trade Secrets, including all copies thereof and shall provide Franchisor with a sworn affidavit confirming that it has fully complied with this Section 16.

  • 21.3. Trade Secrets. Upon termination or expiration of this Agreement, Franchisee shall immediately cease to use any of the Trade Secrets disclosed to Franchisee pursuant to this Agreement. Upon such termination or expiration, Franchisee shall immediately return to Franchisor all confidential or proprietary materials that Franchisor has loaned to Franchisee. Franchisee's continued use of any of the Trade Secrets or any other confidential or proprietary materials or information following the expiration of this

  • 17.4. Franchisee's Covenant Not to Compete, Not to Solicit, and Not to Share Confidential Information Following Expiration or Termination. Upon expiration or termination of this Agreement for any reason, Franchisee, its Principals and, as applicable, its partners, members, and its shareholders (and their respective Family Members) shall not, for a period of two (2) years thereafter, (i) have any interest, directly or indirectly, as an owner, manager, employee, operator, consultant, agent, principal, partner, member, stockholder, corporate officer, director or in any other capacity, or in any other manner whatsoever, in any business, venture, program or enterprise the primary function of which is to provide temporary or permanent employee placement, or otherwise engage or participate in any business that is a "competing business" as that term is defined in Section 15.1, (ii) directly or indirectly, induce, influence, or encourage any client or customer of the Franchise Business to alter, terminate, or breach its contractual or other business relationship with Franchisor, or the Franchise Business, or

solicit it to do business with any "competing business" as that term is defined in Section 15.1, (iii) directly or indirectly, solicit for employment or otherwise induce, influence, or encourage to terminate employment with the Franchise Business, or employ or engage as an independent contractor, any person who is a then current employee of the Franchise Business or any business that operates as a franchisee of Franchisor, or (iv) not share with any "competing business" as that term is defined in Section 15.1, any confidential information or Trade Secrets of Franchisor, the Franchise Business, or Franchisee.

Source: Item 23 — RECEIPTS (FDD pages 67–327)

What This Means (2024 FDD)

According to Management Recruiters' 2024 Franchise Disclosure Document, franchisees must cease using any trade secrets disclosed to them immediately upon termination or expiration of the Franchise Agreement. Franchisees must also return all confidential or proprietary materials that Management Recruiters loaned to them.

Management Recruiters emphasizes that all trade secrets remain the confidential property of the franchisor. As a condition for receiving any payments due from Management Recruiters upon expiration or termination, franchisees must return all materials containing trade secrets, including copies, and provide a sworn affidavit confirming their compliance.

Furthermore, franchisees are prohibited from sharing any confidential information or trade secrets of Management Recruiters with any competing business after the expiration or termination of the agreement. This restriction is part of a broader covenant not to compete, which also prevents franchisees from engaging in or having an interest in any business that provides temporary or permanent employee placement for a period of two years following the termination or expiration of the agreement.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.