What must a Punch King Fitness franchisee do to preserve the confidentiality of the System?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
h 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.
D.Preservation of Confidentiality
Franchisee shall require Franchisee's Principals, directors, officers, and managers, at the time of the commencement of their association with Franchisee, to execute confidentiality agreements, in a form approved by Franchisor, requiring that all information is proprietary or confidential hereunder that may be acquired by or imparted to such persons in connection with their association with Franchisee be held in strict confidence and used solely for the benefit of Franchisee's Franchised Business and Franchisor, at all times during Franchisor's association with Franchisee and thereafter. Such covenants shall include specific identification of Franchisor as a third-party beneficiary of such covenants with the independent right to enforce the same.
ADVERTISING
A.Advertising
Recognizing the value of advertising and the importance of consistency of advertising and promotion to the furtherance of the goodwill and public image of the System, the parties agree that Franchisor shall conduct, determine, maintain, and administer all national and/or regional advertising funds that are or may hereafter be established pursuant to this Section, and shall have sole discretion over the concepts, materials, media, type, nature, scope, frequency, place, form, copy, layout, and content of all national, regional, and local advertising, and accordingly agree as follows:
B.National Advertising Contributions
Franchisee shall make National Advertising Contributions in the amount of 2% of Gross Revenues payable every month to such national advertising fund ("National Advertising Fund") as Franchisor may establish
for advertising for the System.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, franchisees have specific obligations to maintain the confidentiality of the Punch King Fitness System. Franchisees must ensure that their principals, directors, officers, and managers sign confidentiality agreements, using a form approved by Punch King Fitness, at the commencement 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.
These confidentiality agreements must explicitly identify Punch King Fitness as a third-party beneficiary, granting Punch King Fitness the independent right to enforce these agreements. This provision ensures that Punch King Fitness can directly protect its confidential information, even if the franchisee fails to do so.
Furthermore, franchisees are responsible for ensuring that their employees comply with confidentiality requirements, divulging confidential information only to those employees who need access to it for operating the franchised business. Franchisees must also treat the Operating Manual and all information contained within it as confidential and proprietary, using all reasonable efforts to maintain its confidentiality. This includes preventing unauthorized copying, duplication, or recording of the manual or its contents. These confidentiality obligations extend beyond the term of the Franchise Agreement, meaning that even after the agreement expires, terminates, or is canceled, the franchisee must continue to protect the confidential information of the Punch King Fitness System.