If an applicant terminates the Discovery Day agreement with Carls, what must they do with the Confidential Information?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
- 4. Obligations Upon Termination. Upon termination of this Agreement, Applicant and Other Individuals will: (A) immediately cease to use the Confidential Information; (B) return to CJR the Confidential Information and all copies thereof (whether or not the copies were authorized) within 10 days after termination and cause any third party to whom disclosure was made do the same; and (C) at the request of CJR, certify in writing that Applicant and Other Individuals have complied with this Section.
- D. The Confidential Information, and all copies thereof, remain the property of CJR. Neither Applicant nor Other Individuals will acquire any rights in or to the Confidential Information pursuant to this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, if an applicant terminates the Discovery Day agreement, they have specific obligations regarding the confidential information they received. Upon termination of the agreement, the applicant must immediately stop using the confidential information. Within 10 days of termination, they are required to return all copies of the confidential information to Carls, regardless of whether the copies were authorized or not. This includes ensuring that any third party to whom the applicant disclosed the information also returns it.
Furthermore, Carls may request the applicant to certify in writing that they have complied with these requirements. This certification serves as a formal confirmation that the applicant has fulfilled their obligations regarding the confidential information. The confidential information remains the property of Carls, and the applicant does not acquire any rights to it under the agreement.
These obligations are designed to protect Carls's proprietary information and trade secrets. Failure to comply with these requirements could result in legal action by Carls. Prospective franchisees should carefully review these obligations and ensure they understand their responsibilities regarding confidential information both during and after the Discovery Day process.