What actions are Carls franchisees prohibited from taking regarding the Confidential Information without written permission from CKR, PAR Brink and CrunchTime?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall protect the Confidential Information as trade secrets of CKR, PAR Brink and CrunchTime. Franchisee agrees that it shall not, without the written permission of CKR, PAR Brink and CrunchTime: (a) modify any Confidential Information; (b) reverse engineer, decompile, decrypt or disassemble the Confidential Information or attempt to do so; (c) transfer, rent, lease, lend or sublicense any Confidential Information to anyone for any purpose; or (d) reveal or disclose any Confidential Information for any purpose to any other person, firm, corporation or other entity, other than Franchisee's employees with a need to know that Confidential Information, to perform employment responsibilities consistent with Franchisee's rights under this Agreement. Franchisee shall safeguard and protect the Confidential Information from theft, piracy or unauthorized access in a manner at least consistent with the protections Franchisee uses to protect its own most confidential information. Franchisee shall inform its employees of their obligations under this Agreement and shall take those steps as may be reasonable in the circumstances, or as may be reasonably requested by CKR, PAR Brink and CrunchTime, to prevent any unauthorized disclosure, copying or use of the Confidential Information.
- 4.2 Unauthorized Disclosure. Franchisee shall notify CKR immediately upon discovery of any prohibited use or disclosure of the Confidential Information, or any other breach of these confidentiality obligations by Franchisee, and shall fully cooperate with CKR to help CKR regain possession of the Confidential Information and prevent the further prohibited use or disclosure of the Confidential Information.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to the 2024 FDD, Carls franchisees are restricted from certain actions regarding confidential information pertaining to CKR, PAR Brink, and CrunchTime, without obtaining prior written consent. This encompasses a few key areas.
First, franchisees cannot modify any confidential information related to the Carls franchise. Second, they are prohibited from reverse engineering, decompiling, decrypting, or disassembling any confidential information, or even attempting to do so. This protects the proprietary knowledge and systems that make up the Carls brand.
Furthermore, franchisees are barred from transferring, renting, leasing, lending, or sublicensing any confidential information to any third party, regardless of the purpose. Lastly, franchisees cannot reveal or disclose any confidential information to any other person, firm, corporation, or entity. The only exception to this rule is that franchisees can share confidential information with their own employees who have a need to know the information in order to perform their job duties, and even then, this is only allowed if it aligns with the franchisee's rights under the franchise agreement.
Carls franchisees must also actively protect the confidential information from theft, piracy, or unauthorized access, using security measures that are at least as strong as those they use to protect their own most confidential information. They are also obligated to inform their employees of their confidentiality obligations and take reasonable steps to prevent any unauthorized disclosure, copying, or use of the confidential information. If a franchisee discovers any prohibited use or disclosure of confidential information, they must immediately notify CKR and fully cooperate to help regain possession of the information and prevent further unauthorized use or disclosure.