What are the consequences for a Punch King Fitness franchisee violating confidentiality agreements?

According to Punch King Fitness's 2024 Franchise Disclosure Document, franchisees acknowledge that failure to comply with confidentiality requirements will cause the Franchisor irreparable injury. As a result, franchisees consent to the issuance of, and agree to pay all court costs and reasonable attorneys' fees incurred by Punch King Fitness in obtaining, specific performance of, or any injunction against a violation of, the confidentiality requirements. This means Punch King Fitness can seek a court order to force compliance and recover legal expenses from the franchisee.

Confidentiality extends to the Operating Manual, Punch King Fitness methods, the System, and methods of operation. Franchisees must only divulge confidential information to employees who need it to operate the franchised business and are responsible for ensuring their employees also comply with confidentiality requirements. This obligation exists both during the term of the Franchise Agreement and afterward, indicating that confidentiality extends beyond the active franchise period.

Furthermore, all shareholders, officers, partners, or members of the franchisee entity must execute covenants to protect confidential information as a condition of the franchise grant. These covenants acknowledge the confidential nature of the Operating Manual, sales and marketing methods, pricing techniques, promotional materials, new product development, financial information, client or referral lists, and procedures for efficient operation. These individuals agree not to communicate, divulge, or use any trade secrets for the benefit of any other person, entity, or organization, reinforcing the importance Punch King Fitness places on protecting its proprietary information.