Are there any conditions under which The Standardx Confidentiality Agreement might not apply?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
- Exclusions. The term Confidential Information does not include information which (A) was or becomes generally available to the public other than as a result, directly or indirectly, of any disclosure by the receiving party hereunder, or (B) was or becomes available to the receiving party on a non-confidential basis from a source other than the disclosing party or its employees, agent or representatives, provided that such source is not, to the receiving party's knowledge, bound by a confidentiality agreement or otherwise prohibited from transmitting the information to the receiving party by contractual, legal or fiduciary obligations, (C) was within the possession of the receiving party prior to its being furnished to the receiving party by the disclosing party, or (D) information which is incorporated into analyses, studies or internal reports, provided, however, such information, studies, analyses or reports shall be kept confidential in accordance with the receiving party's policies and procedures it
uses to protect and safeguard its own client confidential information.
Covenants Regarding Confidential Information.
The receiving party shall hold all Confidential Information received in confidence and take all necessary steps to keep the Confidential Information confidential with its then current protocols in order to maintain the confidential nature of the Confidential Information in accordance with the terms hereof.
The receiving party may only use Confidential Information for evaluation purposes with respect to the Property and the Business in relationship to the Transaction and may not disclose the Confidential Information to any third party other than to its affiliates, related companies, partners, employees, directors, officers, legal counsel, accountants, prospective lenders, consultants, advisors, principals, and existing investors (collectively, the "Representatives") who have a need to know Confidential Information, provided that the party which shares the Confidential Information with its Representatives shall inform all such Representatives to maintain the confidentiality of the Confidential Information.
Receiving party shall be liable for a breach of this Agreement by its Representatives; provided, however, the receiving party shall not be responsible for any breach of this Agreement by a Representative that has executed a separate confidentiality agreement with the disclosing party with respect to the Transaction.
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, there are specific conditions under which the confidentiality agreement does not apply. The term 'Confidential Information' excludes information that (A) is or becomes generally available to the public through no fault of the receiving party, (B) becomes available to the receiving party on a non-confidential basis from another source not bound by confidentiality, (C) was already in the receiving party's possession, or (D) is incorporated into internal reports, provided such reports are kept confidential according to the receiving party's policies. This means that if information falls into any of these categories, the franchisee is not obligated to keep it confidential under the terms of the agreement.
Furthermore, the franchisee (referred to as the 'Receiving Party') is permitted to disclose Confidential Information to its affiliates, related companies, partners, employees, directors, officers, legal counsel, accountants, prospective lenders, consultants, advisors, principals, and existing investors (collectively, the 'Representatives') who need to know the information, provided that these Representatives are informed of their obligation to maintain confidentiality. However, the franchisee will be held liable for any breach of the agreement by its Representatives unless those Representatives have signed a separate confidentiality agreement with the disclosing party.
These exclusions and permitted disclosures provide some flexibility to the franchisee while still protecting The Standardx's proprietary information. It is important for a prospective franchisee to understand these conditions to ensure compliance with the confidentiality agreement and to avoid potential breaches. Franchisees should also be aware of their responsibility to ensure that their Representatives maintain the confidentiality of the information, unless those Representatives have a direct confidentiality agreement with The Standardx.