What rights do Sonesta Select Sonesta Essential franchisees acquire in the Confidential Information?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
All Confidential Information furnished to you by us or on our behalf, whether orally or by means of written material (i) shall be deemed proprietary, (ii) shall be held by you in strict confidence, (iii) shall not be copied, disclosed or revealed to or shared with any other person except to your employees or contractors who have a need to know such Confidential Information for purposes of this Agreement and who are under a duty of confidentiality no less restrictive than your obligations hereunder, or to individuals or entities specifically authorized by us in advance, and (iv) shall not be used in connection with any other business or capacity. You will not acquire any interest in any of our Confidential Information other than the right to use it as we specify in operating your Hotel during the Term. You agree to adopt and implement reasonable procedures to prevent unauthorized access, use, or disclosure of Confidential Information, including by establishing reasonable security and access measures and restricting its disclosure to key personnel. We reserve the right to require that any employee, agent, or independent contractor that you hire execute a non-disclosure agreement to protect the Confidential Information. We reserve the right to regulate the form of non-disclosure agreement that you use and to be a third-party beneficiary of those agreements with independent enforcement rights. You acknowledge that any form of non-disclosure agreement that we require you to use, provide to you, or regulate the terms of, may or may not be enforceable in a particular jurisdiction. You agree that you are solely responsible for obtaining your own professional advice with respect to the adequacy of the terms and provisions of any confidentiality agreement that your employees, agents, and independent contractors sign.
Confidential Information does not include Restricted Data (as defined in Section 8.M), nor does it include information, knowledge, or know-how which you can demonstrate lawfully came to your attention before we provided it to you directly or indirectly; which, at the time we disclosed it to you, already had lawfully become generally known through publication or communication by others (without violating an obligation to us or our affiliates); or which, after we disclose it to you, lawfully becomes generally known through publication or communication by others (without violating an obligation to us or our affiliates). However, if we include any matter in Confidential Information, anyone who claims that it is not Confidential Information must prove that one of the exclusions provided in this paragraph is fulfilled.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, franchisees do not acquire ownership of the confidential information provided to them. Instead, they are granted a limited right to use it specifically for operating their hotel during the term of the franchise agreement. This confidential information, whether communicated orally or in writing, is considered proprietary and must be held in strict confidence. Franchisees are not allowed to copy, disclose, or share this information with anyone, except their employees or contractors who need to know it for the purposes of the agreement and who are also bound by confidentiality obligations.
The agreement emphasizes that franchisees must implement reasonable procedures to prevent unauthorized access, use, or disclosure of confidential information. This includes establishing security measures and restricting disclosure to key personnel. Sonesta Select Sonesta Essential retains the right to require franchisees' employees, agents, or independent contractors to sign non-disclosure agreements to further protect the confidential information.
However, there are exceptions to what constitutes confidential information. Information that the franchisee can demonstrate was already known to them, or was publicly available before Sonesta Select Sonesta Essential disclosed it, or becomes publicly known without violating any obligations, is not considered confidential. The burden of proof lies with the franchisee to demonstrate that any of these exclusions apply. This ensures that franchisees are only restricted from using information that truly originates from and is proprietary to Sonesta Select Sonesta Essential.