Can the confidential information of Pearce Bespoke be used for purposes other than operating the franchise?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
g violation, formally defaulting and terminating this Agreement or exercising any of Franchisor's rights under this Agreement.
9. CONFIDENTIAL INFORMATION
A. Non-Disclosure of Confidential Information.
Franchisee and those individuals who have signed the Personal Guaranty attached hereto as Attachment B agree to use and permit the use of Franchisor's Confidential Information (as defined below) solely in connection with the operation of the Pearce Bespoke Franchise. Franchisee and Personal Guarantors further agree that they will never, during the initial term or any renewal term of this Agreement, or any time after this or any renewal Franchise Agreement expires or terminates, or Franchisee's rights under this Agreement or any renewal Franchise Agreement are assigned or terminated, divulge or use any of Franchisor's Confidential Information for the benefit of any third party (including any person, business entity or enterprise of any type or nature), nor will Franchisee or Personal Guarantors directly or indirectly aid such third party to imitate, duplicate or "reverse engineer" any of Franchisor's Confidential Information. "Confidential Information" means all information, knowledge, trade secrets, or know-how utilized by the Business System, or which otherwise concerns Franchisee's or Franchisor's systems of operation, programs, services, products, customers, practices, materials, books, records, manuals, computer files, databases, or software. Confidential Information includes (without limitation): all elements of the Business System and all products, services, equipment, technologies, policies, standards, requirements, criteria and procedures that now or in the future are part of the Business System; Franchisor's Operations Manual (including supplements to the Manual); all specifications, sources of supply, all procedures, systems, techniques and activities employed by Franchisor or Franchisee in the offer and sale of products and or services at the Pearce Bespoke Franchise; all pricing paradigms established by Franchisor or by Franchisee; all of Franchisor's and/or Franchisee's sources (or prospective sources) of supply and all information pertaining to same (including wholesale pricing structures, the contents of sourcing agreements and identity of suppliers); Franchisor's specifications, and Franchisee's final plans, for the construction, build-out, design, renovation, décor, equipment, signage, furniture, items and trade dress elements of the Pearce Bespoke Franchise; the identity of, and all information relating to, the computer and DRS POS hardware and software utilized by Franchisor and Franchisee; all information pertaining to Franchisor's and Franchisee's advertising, marketing, promotion and merchandising campaigns, activities, materials, specifications and procedures; all customer lists, customer data and other records generated and/or otherwise maintained by the Pearce Bespoke Franchise; Franchisor's Internet Code of Conduct, social media policy, internet/web protocols, procedures and content; Franchisor's training and other instruction programs and materials; all communications between Franchisor and Franchisee (including the financial and other reports Franchisee is required to submit to Franchisor under the Agreement); additions to, deletions from and modifications and variations of the components of the Business System and all other information, knowledge and know-how which Franchisor and its affiliates, now or in the future, designate as confidential.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, franchisees and personal guarantors are explicitly prohibited from using the franchisor's confidential information for any purpose other than operating their Pearce Bespoke franchise. This restriction applies both during the term of the franchise agreement and even after the agreement expires or is terminated. The franchisee cannot use the confidential information for the benefit of any third party.
Pearce Bespoke defines "Confidential Information" broadly to include all information, knowledge, trade secrets, or know-how utilized by the Business System, systems of operation, programs, services, products, customers, practices, materials, books, records, manuals, computer files, databases, or software. Franchisees are also prohibited from copying, duplicating, recording, or reproducing any of the confidential information, or sharing it with any third party. Upon termination of the agreement, franchisees must return or destroy all confidential information as requested by Pearce Bespoke.
This stringent protection of confidential information is typical in franchising to safeguard the brand's competitive advantage and proprietary business methods. The FDD specifies that all customer lists or information obtained by the franchisee are the property of Pearce Bespoke, which Pearce Bespoke may use to market to the franchisee's customers both during and after the franchise term. Franchisees are only allowed to share confidential information with their operational personnel on a "need to know" basis and must ensure these individuals also maintain confidentiality. This highlights the importance of maintaining the confidentiality of Pearce Bespoke's business practices and customer information.
Prospective franchisees should carefully consider these restrictions and ensure they understand the scope of confidential information and their obligations to protect it. Failure to comply with these confidentiality requirements could result in legal action from Pearce Bespoke.