In the preliminary agreement for a Carls franchise, what is the purpose of the agreement between CJR and the applicant?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
- A. Applicant wishes to be considered by CJR for a franchise opportunity to develop and operate one or more Carl's Jr. ("Franchised Restaurants").
- B. Before CJR will consider offering Applicant a franchise opportunity, Applicant must attend a meeting at CJR's offices and at a Carl's Jr. during which Applicant will have the opportunity to meet with, and be evaluated by, various CJR personnel ("Discovery Day"). In addition, CJR may require that Applicant, and/or an employee or employees or other individual or individuals designated by Applicant, and as agreed to and deemed appropriate by CJR ("Other Individuals"), each satisfactorily complete other training programs (collectively "Training Programs"), depending on CJR's determination of the need of those attending the Training Programs.
- C. CJR will provide Applicant and Other Individuals a variety of information both while Applicant and Other Individuals attend Discovery Day and the Training Programs and thereafter, if CJR and Applicant continue to pursue a franchise opportunity.
- D. The information that will be provided by CJR is confidential and CJR is not willing to disclose the information to Applicant or Other Individuals unless they agree to keep the information confidential. Accordingly, the parties are entering into this Agreement to ensure that Applicant and Other Individuals keep all such information confidential.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, agreements and obligations set forth below, the parties agree as follows:
1. Confidential Information. As used in this Agreement, the term "Confidential Information" means any and all information, manuals and materials containing trade secrets; non-public business methods; improvements; data processes; formulae; designs; know-how; maps and trade area analyses; and all confidential technical and non-technical information that is disclosed by or on behalf of CJR or its affiliates to Applicant and/or Other Individuals. "Confidential Information" also includes all other information that Applicant and/or Other Individuals know or have reason to know is the confidential, trade secret, or proprietary information of CJR and/or its affiliates.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to the 2024 FDD, the preliminary agreement between CJR (Carls Jr. Restaurants LLC) and a franchise applicant is to ensure the confidentiality of information disclosed during the Discovery Day and Training Programs. Carls requires applicants to attend a meeting at CJR's offices and a Carls Jr. restaurant, called "Discovery Day", to meet with and be evaluated by CJR personnel. CJR may also require applicants to complete training programs. During these events and afterward, CJR will provide applicants with confidential information.
Because the information shared by Carls is confidential, CJR requires applicants to agree to keep the information confidential before disclosing it. The agreement ensures that applicants and any other individuals they designate keep all such information confidential. This includes trade secrets, non-public business methods, improvements, data processes, designs, know-how, maps, trade area analyses, and all confidential technical and non-technical information disclosed by CJR or its affiliates. It also covers any other information that the applicant knows or has reason to know is confidential, a trade secret, or proprietary information of CJR or its affiliates.
This agreement protects Carls' proprietary information and trade secrets by legally binding the applicant to non-disclosure. For a prospective franchisee, this means they must carefully handle all information received from Carls during the application process and understand the restrictions on its use and disclosure, even if they ultimately do not become a franchisee. Failing to comply with the confidentiality agreement could result in legal action from Carls.