What actions related to confidential information are prohibited for a Punch King Fitness franchisee?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
to the contents of the Operations Manual, the terms of the master copy of the Operations manual maintained by Franchisor at Franchisor's home office shall be controlling. Upon Franchisor's request, Franchisee will cooperate in the efficient return of all Operations manuals that have been identified by the Franchisor as obsolete.
CONFIDENTIAL INFORMATION
A.Use of Confidential Information
Franchisee shall not, during the term of this Agreement and thereafter, communicate, divulge, or use for the benefit of any other person, persons, partnership, association, or corporation any confidential information, knowledge, or know-how concerning the Punch King Fitness Method, the System, or the methods of operation hereunder that may be communicated to Franchisee, or of which Franchisee may be apprised, by virtue of Franchisee's business operations under the terms of this Agreement. Franchisee shall divulge such confidential information only to such of its employees as must have access to it in order to operate the Franchised Business as described herein. In connection therewith, Franchisee shall be fully responsible for ensuring that its employees comply with this Section.
B.Use of and Improvements to the Method
In order to assure maximum uniformity of quality and service in all treatments provided by all Punch King Fitness employees and staff, Franchisee agrees to follow the procedures prescribed by Punch King Fitness methods strictly. As Franchisor develops or learns of improvements, enhancements, or innovations in the procedures and techniques embodied in the Punch King Fitness Method, Franchisor will disseminate such information to all franchisees of the system and authorize their use in the Franchised Business. In return and in consideration, therefore, Franchisee agrees that any idea or suggested innovation or variation that may tend to enhance or improve the Punch King Fitness Method that Franchisee develops, discovers, or otherwise becomes aware of during the term of this Agreement shall be submitted to Franchisor for its evaluation for adoption and use, and Franchisee agrees that all proprietary rights to such ideas, innovations, improvements, enhancements, or variations created or acquired by Franchisee or any of its employees shall belong exclusively to Franchisor and may be made available to all Punch King Fitness and Punch King Fitness franchisees and Punch King Fitness licensees.
C. Remedies
Franchisee acknowledges that any failure to comply with this Section will cause Franchisor irreparable injury, and Franchisee consents to the issuance of and agrees to pay all court costs and reasonable attorneys' fees incurred by Franchisor in obtaining, specific performance of, or any injunction against a violation of, the requirements of this Section.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, franchisees are prohibited from communicating, divulging, or using confidential information for the benefit of any other person or entity during the term of the Franchise Agreement and thereafter. This restriction applies to any confidential information, knowledge, or know-how concerning the Punch King Fitness Method, the System, or the methods of operation. Franchisees are only allowed to share confidential information with employees who need it to operate the Franchised Business, and the franchisee is responsible for ensuring these employees also comply with confidentiality requirements.
Punch King Fitness also considers its Operating Manual and all information within it as confidential and proprietary. Franchisees must treat the Operating Manual as such and use all reasonable efforts to maintain its confidentiality. Franchisees are explicitly prohibited from copying, duplicating, recording, or making the manual available to any unauthorized person. These obligations regarding the Operating Manual survive the expiration, termination, or cancellation of the Franchise Agreement.
Furthermore, franchisees must ensure that their principals, directors, officers, and managers sign confidentiality agreements, in a form approved by Punch King Fitness, at the start of their association with the franchisee. These agreements must stipulate that all proprietary or confidential information acquired by or imparted to these individuals is held in strict confidence and used solely for the benefit of the franchisee's Franchised Business and Punch King Fitness. Punch King Fitness is specifically identified as a third-party beneficiary of these covenants, with the independent right to enforce them. Failure to comply with these confidentiality obligations can result in irreparable injury to Punch King Fitness, and the franchisee may be liable for court costs and attorneys' fees incurred by Punch King Fitness in enforcing these provisions.