Is the franchisee allowed to share Punch King Fitness Trade Secrets with their employees?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
er 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.
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 permitted to share confidential information, including trade secrets, with their employees, but only to a limited extent. Franchisees can only share such information with employees who require access to it in order to effectively operate the franchised business.
Furthermore, Punch King Fitness requires franchisees to ensure that their employees comply with the confidentiality terms outlined in the franchise agreement. This means franchisees are responsible for their employees' actions regarding confidential information.
To ensure compliance, Punch King Fitness mandates that franchisees require their Principals, directors, officers, and managers to sign confidentiality agreements at the commencement of their association. These agreements must be in a form approved by Punch King Fitness, ensuring that all proprietary or confidential information is held in strict confidence and used solely for the benefit of the franchisee's business and Punch King Fitness itself. These confidentiality agreements also identify Punch King Fitness as a third-party beneficiary, giving them the independent right to enforce the agreements.