What action must a Carls licensee take upon termination of the Licensed Program and Content agreement?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.2 Cessation of Use. Upon termination of this Agreement, Licensor will disconnect Licensee from the Licensed Program and Content and deactivate passwords, as applicable. Licensee shall cease
using the Licensed Program and Content and promptly return to Licensor all copies of all such materials and all other Confidential Information in its possession or control. Licensee shall delete all copies of such materials residing in on-line or off-line computer memory, and destroy all copies of such materials that also incorporate Confidential Information. Licensor shall be entitled to enter the Franchised Restaurants to repossess and remove the Licensed Program and Content, and any other Confidential Information. Licensee shall, within 5 days from the effective date of the termination, certify to Licensor, in writing by an officer or director, that all copies of the Licensed Program and Content have been returned, deleted or destroyed. In the event of termination of the License granted by this Agreement for fewer than all Franchised Restaurants, Licensee shall comply with the foregoing with respect to the applicable Franchised Restaurants. Notwithstanding forgoing, upon request Licensee shall have the right to receive from Licensor such readily accessible reports or information containing data of Licensee's completed training modules (or other available data) with the understanding that Licensor shall not have the right to incur any additional expenses to provide such data to Licensee.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, upon termination of the Licensed Program and Content agreement, the licensee must take several actions to ensure a clean break and protect Carls's confidential information. Carls will disconnect the licensee from the Licensed Program and Content, which includes deactivating passwords. The licensee is then obligated to immediately cease using the Licensed Program and Content.
Furthermore, the licensee must promptly return to Carls all copies of the Licensed Program and Content materials, along with any other confidential information in their possession or control. This includes physical copies and any digital copies stored in computer memory, whether online or offline. Any materials that incorporate confidential information must be destroyed. To ensure compliance, the licensee must certify in writing to Carls, within 5 days of the termination date, that all copies of the Licensed Program and Content have been returned, deleted, or destroyed. This certification must be provided by an officer or director of the licensee.
Carls also retains the right to enter the franchised restaurants to repossess and remove the Licensed Program and Content, as well as any other confidential information. However, the licensee has the right to request and receive readily accessible reports or information containing data of the licensee's completed training modules or other available data from Carls, provided that Carls does not incur any additional expenses to provide such data. These obligations apply even if the termination affects fewer than all of the franchised restaurants, in which case the licensee must comply with these requirements for the applicable restaurants.