Does the FDD require Carls to protect or defend copyrights or confidential information?

According to Carls' 2024 Franchise Disclosure Document, Carls is not required by any agreement to protect or defend copyrights or confidential information, although they intend to do so as appropriate. However, franchisees are required to protect Carls' confidential information.

Carls owns the copyright to its advertising and marketing materials. During the franchise term, franchisees gain access to trade secret information considered confidential and proprietary to Carls, including manuals, formulas, methods, customer information, and vendor lists. Franchisees must maintain the confidentiality of this information and can only disclose it to employees and agents with a legitimate need to know, ensuring they also adhere to confidentiality requirements. Franchisees also agree not to challenge Carls' interest in the trade secrets and confidential information that make up the Carls system.

Franchisees acknowledge they will have access to valuable trade secrets and confidential information from Carls regarding development, operations, product preparation, sales, market research, advertising, and purchasing. Franchisees recognize that the know-how of the Carls system and the experience they gain are of substantial value. Carls has invested significantly in developing the system and needs to protect its trade secrets and confidential information to encourage the free exchange of ideas among operators. All quick-service restaurants are considered direct competitors, and restrictions on franchisees' activities are necessary to protect the system.