For Red Wagon Club, what must a franchisee do regarding persons who have access to Confidential Information?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
ial Information absolutely confidential, both during the Term and then thereafter;
- (c) will not make unauthorized copies of any Confidential Information disclosed via electronic, virtual, or digital medium or in written or other tangible form;
- (d) will adopt and implement reasonable procedures to prevent unauthorized use or disclosure of Confidential Information, including by restricting its disclosure and/or by requiring persons who have access to the Confidential Information to execute Franchisor's then-current form of confidentiality agreement; and
- (e) will not sell, trade, or otherwise profit in any way from the Confidential Information, except using methods approved by Franchisor.
Without limiting the generality of the foregoing obligations, Franchisor reserves the right to require that any employee, agent, or independent contractor that Franchisee hires execute a non-disclosure and noncompetition agreement to protect the Confidential Information. Franchisor reserves the right to regulate the form of such non-disclosure and non-competition agreement that Franchisee uses and to be a third-party beneficiary of those agreements with independent enforcement rights. Franchisee acknowledges that any form of non-disclosure and non-competition agreement that Franchisor requires Franchisee to use, provide to Franchisee, or regulate the terms of, may or may not be enforceable in a particular jurisdiction.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, franchisees must adopt and implement reasonable procedures to prevent unauthorized use or disclosure of Confidential Information. These procedures include restricting its disclosure and/or requiring persons who have access to the Confidential Information to execute Red Wagon Club's then-current form of confidentiality agreement.
Red Wagon Club reserves the right to require that any employee, agent, or independent contractor that the franchisee hires execute a non-disclosure and non-competition agreement to protect the Confidential Information. Red Wagon Club also reserves the right to regulate the form of such non-disclosure and non-competition agreement that the franchisee uses and to be a third-party beneficiary of those agreements with independent enforcement rights.
The franchisee acknowledges that any form of non-disclosure and non-competition agreement that Red Wagon Club requires the franchisee to use, provide to the franchisee, or regulate the terms of, may or may not be enforceable in a particular jurisdiction. The franchisee agrees that the franchisee is solely responsible for obtaining the franchisee's own professional advice with respect to the adequacy of the terms and provisions of any non-disclosure and non-competition agreement that the franchisee's employees, agents, and independent contractors sign.
This means that a Red Wagon Club franchisee must take proactive steps to safeguard confidential information, including having employees or anyone with access to this information sign confidentiality agreements. The franchisee bears the responsibility of ensuring these agreements are legally sound and enforceable within their specific jurisdiction, potentially requiring them to seek legal counsel.