Can Red Wagon Club designate any other information as confidential or proprietary?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
- (1) training and operations materials, including the Operations Manual;
- (2) the System Standards and other methods, formats, specifications, standards, systems, procedures, sales and marketing techniques, knowledge, and experience used in developing and operating Businesses;
- (3) information regarding potential marketing, advertising and promotional programs and strategies related thereto, and analyses of the performance and results of such programs once implemented;
- (4) strategic plans, including expansion strategies and targeted demographics;
- (5) knowledge of, specifications for and suppliers of, and methods of ordering, Operating Assets and other products and supplies;
- (6) any computer software or similar technology which is proprietary to Franchisor or the System, including digital passwords and identifications and any source code of, and data, reports, and other printed materials generated by, the software or similar technology;
- (7) knowledge of the operating results and financial performance of Businesses other than Franchisee's RWC Business;
- (8) information generated by, or used or developed in, Franchisee's RWC Business' operation, including information contained from time to time in the Technology System;
- (9) lists of current, former, and prospective Members of Franchisor's, its affiliates, or any other Business, including information such as Member names, contact persons, addresses, telephone numbers, e-mail addresses, buying habits, preferences, demographic information, and related information (collectively, "Member Information");
- (10) criteria for approving or rejecting proposed suppliers of any of the System Standards; and
- (11) any other information designated as confidential or proprietary by Franchisor.
All Confidential Information will be owned by Franchisor. Franchisee acknowledges and agrees that Franchisee will not acquire any interest in Confidential Information, other than the right to use it as Franchisor specifies in operating Franchisee's RWC Business during the Term, and that Confidential Information is proprietary, includes Franchisor's trade secrets, and is disclosed to Franchisee only on the condition that Franchisee agrees, and Franchisee in fact does agree, that Franchisee, its owners, and its employees:
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, Red Wagon Club has the authority to designate information as confidential or proprietary. The agreement specifies several categories of information considered confidential, including training materials, system standards, marketing strategies, strategic plans, supplier information, proprietary software, operating results of other businesses, information generated by the franchisee's business, member lists, and criteria for supplier approval.
Beyond these explicitly listed items, Red Wagon Club retains the right to classify "any other information" as confidential or proprietary. This broad clause grants Red Wagon Club significant discretion in determining what information is protected. Franchisees are obligated to treat all designated confidential information as proprietary and agree not to acquire any interest in it, beyond the right to use it within the scope of operating their Red Wagon Club business during the term of the franchise agreement.
This means that Red Wagon Club franchisees must be vigilant about protecting a wide range of information, including data and insights generated within their own franchise operations. The franchisee acknowledges that all ideas, concepts, techniques, or materials relating to an RWC Business, whether or not protectable intellectual property and whether created by or for Franchisee or Franchisee's owners or employees, must be promptly disclosed to Franchisor and will be Franchisor's sole and exclusive property. Franchisees should be aware of these obligations and take appropriate measures to safeguard confidential information, as defined by Red Wagon Club, to avoid potential breaches of the franchise agreement.
It is also important to note the exceptions to what constitutes Confidential Information. Information that the franchisee lawfully possessed before receiving it from Red Wagon Club, or information that becomes publicly available without violating any obligations to Red Wagon Club, is not considered confidential. However, the burden of proof lies with the franchisee to demonstrate that any information claimed not to be confidential meets these exclusion criteria.