What event triggers the termination of the confidentiality agreement obligations for The Standardx?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as otherwise set forth herein, the obligations set forth in this Agreement shall terminate upon the execution of definitive agreements between the parties with respect to the Transaction or two (2) years from the date of this Agreement, whichever occurs first; provided, however, that notwithstanding the termination of this Agreement, the confidentiality obligations of the Company with respect to a Hyatt Trade Secret shall continue until the later of (i) five (5) years from the date of this Agreement, and (ii) until such time that Hyatt has provided notice that the Hyatt Trade Secret is no longer deemed by Hyatt to be a trade secret.
Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the confidentiality obligations outlined in the agreement terminate upon the execution of definitive agreements between the involved parties regarding the transaction or two years from the agreement's date, whichever comes first. However, the confidentiality obligations concerning a Hyatt Trade Secret extend until the later of (i) five years from the agreement date, or (ii) until Hyatt provides notice that the Hyatt Trade Secret is no longer considered a trade secret.
This means that a franchisee's duty to keep information confidential generally lasts for two years, aligning with the active negotiation or evaluation period. However, The Standardx retains extended protection for its most critical trade secrets, ensuring these remain confidential for at least five years, or potentially indefinitely if the company continues to deem them trade secrets.
For a prospective franchisee, this highlights the importance of understanding what constitutes a 'Hyatt Trade Secret' and the implications of handling such information. While general confidentiality has a defined term, trade secrets are subject to a potentially much longer period of protection, requiring extra vigilance in handling such information to avoid potential legal repercussions.