After termination of the relationship with Monicals Pizza, does the recipient's obligation to maintain confidentiality continue?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
- b) Recipient's obligations under paragraph 2(a) of this Agreement shall continue in effect after termination of Recipient's relationship with Franchisee, regardless of the reason or reasons for termination, and whether such termination is voluntary or involuntary, and Franchisee is entitled to communicate Recipient's obligations under this Agreement to any future customer or employer to the extent deemed necessary by Franchisee for protection of its rights hereunder and regardless of whether Recipient or any of its affiliates or assigns becomes an investor, partner, joint venturer, broker, distributor or the like in a Monical's Pizza Restaurant.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the recipient's obligation to maintain confidentiality continues even after the termination of their relationship with the franchisor. Specifically, the obligations under paragraph 2(a) of the agreement remain in effect regardless of the reason for termination, whether it is voluntary or involuntary.
This means that even after a franchisee leaves the Monicals Pizza system, they are still legally bound to protect the company's trade secrets and confidential information. This includes not disclosing or using such information for the benefit of any other person or entity. Monicals Pizza is also entitled to inform future customers or employers of the recipient about these confidentiality obligations to protect its rights.
This clause is designed to protect Monicals Pizza's proprietary information and maintain its competitive advantage. Prospective franchisees should carefully consider the scope of the confidential information they will be exposed to and the long-term implications of this confidentiality clause. It is a standard practice in franchising to have confidentiality agreements that extend beyond the term of the franchise agreement to protect the franchisor's business interests.