Can a Carls franchisee use Consumer Information for purposes outside of operating the Franchised Restaurant?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
rvices only through CJR's designated providers to customers in Franchisee's market. On or before the Opening Date of the Franchised Restaurant opens, Franchisee agrees to enter into the OLO Authorized Operator Agreement with Olo, Inc. Franchisee further agrees to enter into any participation agreement required with CJR's designated delivery providers at the same time (currently, the approved delivery providers are Uber Eats, Door Dash, and GrubHub). Unless CJR provides its prior written consent, Franchisee agrees that it will not provide its own delivery service or use its employees to deliver orders to Franchisee's customers.
O. Customer Satisfaction Programs
In order to (among other things) maintain and enhance the goodwill associated with the Proprietary Marks, the System and each Carl's Jr. Restaurant, Franchisee agrees to participate in programs initiated to verify customer satisfaction and/or Franchisee's compliance with all operational and other aspects of the System, including (but not limited to) secret shoppers, customer survey, or other Quality Assurance ("QA") or similar programs as CJR may require. CJR will share the results of these programs, as they pertain to the Franchised Restaurant, with Franchisee. Franchisee will reimburse CJR for all costs related to the Franchised Restaurant associated with any and all of these programs.
P. Consumer Information
Franchisee may only use Consumer Information (as defined below) to the extent necessary to perform Franchisee's obligations under this Agreement during the term hereof and subject to such instructions and restrictions as CJR may from time to time impose and in compliance with all data privacy, security and other applicable laws. "Consumer Information" means any identifiers (including name, address, phone numbers, usernames, birthdates and e-mail addresses), sales, transaction, loyalty and payment history, and all other information about or related to any customer or prospective customer, including any information deemed "personal information" or "personal data" under applicable law. As used in this Agreement, the term "customer" refers to any person or entity (i) whose information is collected by
any CJR system or application or included in any consumer or customer database, file or system owned or controlled by CJR, its parent, subsidiary or affiliate companies; (ii) who is included on any marketing or customer lists Franchisee develops or uses or any customer information generally collected and saved for any reason; (iii) who has purchased, purchases or intends to purchase products or services online, through an CJR application, or at the Franchised Restaurant; or (iv) who has been solicited to purchase any products or services at the Franchised Restaurant. CJR may use the Consumer Information as CJR deems appropriate, including sharing it with CJR's affiliates.
CJR owns all Consumer Information and may use the Consumer Information as it deems appropriate (subject to applicable law), including disclosing it to vendors or sharing it with its affiliates for cross-marketing or other purposes.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, a franchisee's use of consumer information is restricted to the operation of the franchised restaurant. Carls owns all consumer information and can use it as they see fit, including sharing it with affiliates. The franchisee can only use consumer information to the extent permitted by the franchise agreement and in compliance with data privacy laws.
Carls's franchisees cannot sell or share consumer information with third parties for valuable consideration. They are only allowed to use or disclose consumer information for the specific business purposes outlined in the agreement, maintaining the direct business relationship between the franchisee and Carls. Combining consumer information from Carls with personal information from other sources is prohibited, unless specifically allowed by privacy laws.
Furthermore, franchisees must get Carls's approval before allowing anyone other than their direct employees to process consumer information. Subcontracting is only allowed with a written agreement that imposes obligations at least as restrictive as those in the franchise agreement. The franchisee is liable for any breaches caused by subcontractors.
These restrictions ensure that Carls maintains control over consumer data and that franchisees adhere to strict privacy and security standards. This protects both the brand and its customers, but it also limits the franchisee's ability to leverage consumer data for independent marketing or other business purposes outside the scope of the franchise agreement.