Can a Precision Door Service franchisee communicate Confidential Information to employees?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, each Neighborly Franchisor and its affiliates have developed, at considerable effort and expense, the Neighborly Franchisor's System, which will be revealed to Franchisee pursuant to the applicable Neighborly Franchisor's Franchise Agreement, and you will be involved in the operation of a Franchised Business such that you will be exposed to and learn procedures, techniques and other matters that are identified and treated by the applicable Neighborly Franchisor as confidential, proprietary or trade secret, including, without limitation, information regarding the operational, sales, and marketing methods and techniques of the applicable Neighborly Franchisor (such information disclosed by any such Neighborly Franchisor pursuant to a Franchise Agreement, collectively, the "Confidential Information"); and
WHEREAS, you agree that you will receive material benefit from a Neighborly Franchisor entering into a Franchise Agreement with Franchisee. In exchange for that good consideration, you agree to execute and be bound by this Agreement.
NOW, THEREFORE, you hereby agree as follows:
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- Acknowledgement of Confidentiality Obligation. You acknowledge that through your association or relationship with Franchisee, you will receive valuable Confidential Information that provides a competitive advantage in the development of the applicable Franchised Business. You acknowledge and agree that any such Confidential Information, including all Operations Manuals, are confidential and proprietary in nature and contain trade secrets belonging to the applicable Neighborly Franchisor and that all such tangible evidence of Confidential Information is a property right of great value to each Neighborly Franchisor. You hereby agree to be bound by the provisions of each Franchise Agreement related to confidentiality and protection of trade secrets, including but not limited to Section 5.H of each Franchise Agreement, to the same extent as if a party to the Franchise Agreement.
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- Non-Use. You agree not to use Confidential Information without prior written approval from the applicable Neighborly Franchisor other than as provided for in the applicable Franchise Agreement.
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Non-Disclosure.
Without prior written approval from the applicable Neighborly Franchisor, you agree not to disclose, communicate or divulge any Confidential Information for your benefit or for the benefit of any other third party, including, without limitation, a competitor of the applicable Franchised Business and/or the applicable Neighborly Franchisor.
Exclusions.
Confidential Information does not include and this Agreement does not apply to information that (a) was previously known by you, (b) is or becomes part of the public domain other than through a breach by you of this Agreement, (c) is otherwise obtained by you by a means other than a breach of this Agreement or (to your knowledge) a third party's breach of its confidentiality obligation to a Neighborly Franchisor, or (d) is independently developed by you without reference to the Confidential Information.
Source: Item 23 — Receipts (FDD pages 92–433)
What This Means (2025 FDD)
According to the 2025 Precision Door Service FDD, the ability of a franchisee to communicate Confidential Information is restricted. Specifically, any individual associated with an entity entering into a franchise agreement, such as an owner, officer, or director, must agree not to disclose Confidential Information without prior written approval from the applicable Neighborly Franchisor. This restriction extends to communications for the benefit of the individual or any third party, including competitors.
The FDD outlines that Confidential Information includes operational, sales, and marketing methods and techniques. This information is considered a trade secret and proprietary to Precision Door Service. The agreement emphasizes that access to this Confidential Information provides a competitive advantage, and all tangible evidence of it, including Operations Manuals, remains the property of the franchisor.
However, there are exclusions to what constitutes Confidential Information. Information that was already known, becomes public without a breach of the agreement, is obtained through legitimate means, or is independently developed without reference to the Confidential Information is not subject to the non-disclosure restrictions. Therefore, while franchisees and related parties are generally prohibited from disclosing Confidential Information, there are specific exceptions that allow for the use and communication of information obtained independently or through public sources.