Can a Sonesta Simply Suites franchisee use Confidential Information in connection with any other business?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
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 pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, franchisees are strictly prohibited from using any confidential information obtained from the franchisor in connection with any other business or capacity. The FDD emphasizes that all confidential information, whether communicated orally or in writing, is proprietary and must be held in strict confidence. This information cannot be copied, disclosed, or shared with any other person, except for employees or contractors who have a need to know for the purposes of the Franchise Agreement and are under a similar duty of confidentiality.
The agreement specifies that franchisees do not acquire any interest in Sonesta Simply Suites's confidential information beyond the right to use it as specified for operating their hotel during the term of the agreement. Franchisees are required to implement reasonable procedures to prevent unauthorized access, use, or disclosure of confidential information, including establishing security measures and restricting disclosure to key personnel. Sonesta Simply Suites also reserves the right to require employees, agents, or independent contractors to execute non-disclosure agreements to protect the confidential information, and the franchisor can regulate the form of these agreements and act as a third-party beneficiary with independent enforcement rights.
There are exceptions to what constitutes confidential information. Information that the franchisee can demonstrate was already lawfully known, or that became generally known through publication without violating any obligations, is not considered confidential. However, the burden of proof lies with the franchisee to demonstrate that any information claimed not to be confidential falls under these exclusions. This stringent protection of confidential information is a standard practice in franchising to maintain the integrity and competitive advantage of the franchise system.