Is maintaining the secrecy and confidentiality of Confidential Information for Stretch Zone required both during and after the Initial Term?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Unauthorized Use. You agree that, during and after the Initial Term, you, your Franchise Owners, Designated Representative, Regional Managers and employees will:
- (i) Not use the Confidential Information in any other business or capacity, including any derivative or spin-off of the Stretch Zone concept;
- (ii) Maintain the absolute secrecy and confidentiality of the Confidential Information during and after the Initial Term;
- (iii) Not make unauthorized copies of any portion of the Confidential Information disclosed or recorded in written or other tangible form; and
- (iv) Adopt and implement all procedures that we require to prevent unauthorized use or disclosure of, or access to, the Confidential Information.
- (v) Not modify, reverse engineer, decompile, create other works from or disassemble any of our or any of our Affiliates' Confidential Information, except as we permit in writing.
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to the 2025 Stretch Zone FDD, franchisees are obligated to maintain the secrecy and confidentiality of the Confidential Information both during and after the Initial Term of the franchise agreement. This obligation extends not only to the franchisee but also to their Franchise Owners, Designated Representatives, Regional Managers, and employees.
The FDD specifies several actions that franchisees and their personnel must adhere to in order to protect this information. These include not using the Confidential Information in any other business or capacity, maintaining absolute secrecy and confidentiality, refraining from making unauthorized copies, implementing procedures to prevent unauthorized use or disclosure, and not modifying, reverse engineering, or disassembling any of Stretch Zone's Confidential Information.
This requirement is typical in franchising, as franchisors need to protect their trade secrets and proprietary information to maintain a competitive advantage and ensure consistency across all franchise locations. For a prospective Stretch Zone franchisee, this means understanding that the obligation to protect Confidential Information is a long-term commitment that extends beyond the active operation of the franchise. Failure to comply with these confidentiality requirements could result in legal action and potential damages.