During the term of the Franchise Agreement, will I have access to trade secret information that is confidential and proprietary to Carls?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
During the term of the Franchise Agreement, you will have access to trade secret information that is confidential and proprietary to us such as manuals, formulas, methods, Customer Information, vendor and pricing lists and policies. For example, the OPM and other materials contain CJR's detailed standards and specifications for managing and operating your Franchised Restaurant and other proprietary information may discuss the selection, purchase, storage, preparation, packaging, ingredients, recipes,
service and sale of the products and beverages you will sell at your Franchised Restaurant. The OPM also contains information on management and employee training, marketing, advertising and sales promotions, signs, fixtures and furnishings, employee dress attire and appearance standards, menu concept, and business practices and procedures, such as bookkeeping, accounting, records retention and other business systems.
You acknowledge that the trade secrets derive independent economic value from not being generally known to and not readily ascertainable to others. You agree to hold in confidence and agree not to disclose or in any way make available to any unauthorized person any trade secret or any information regarding any trade secret or any proprietary information made available to you by us. You may disclose trade secrets only to your employees and agents with a legitimate need to know, each of whom you will warrant will be subject to this confidentiality requirement. You also agree not to contest CJR's interest in the trade secrets and confidential and proprietary information that comprise the Carl's Jr. System.
We are not required by any agreement to protect or defend copyrights or confidential information, although we intend to do so as appropriate.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 58–59)
What This Means (2024 FDD)
According to the 2024 FDD, during the term of the Franchise Agreement, franchisees will have access to trade secret information that is confidential and proprietary to Carls. This includes manuals, formulas, methods, Customer Information, vendor and pricing lists and policies. The Operations Procedures Manual (OPM) contains detailed standards and specifications for managing and operating the franchised restaurant. It also includes proprietary information regarding the selection, purchase, storage, preparation, packaging, ingredients, recipes, service, and sale of products and beverages.
The OPM further contains information on management and employee training, marketing, advertising and sales promotions, signs, fixtures and furnishings, employee dress attire and appearance standards, menu concept, and business practices and procedures, such as bookkeeping, accounting, records retention and other business systems. Carls considers these trade secrets to have independent economic value because they are not generally known or easily discoverable by others.
As a franchisee, you must maintain the confidentiality of these trade secrets and not disclose them to unauthorized individuals. Disclosure is permitted only to employees and agents with a legitimate need to know, provided they are also subject to confidentiality requirements. Franchisees also agree not to contest Carls's interest in these trade secrets and confidential information. Carls intends to protect its copyrights and confidential information as appropriate, although it is not obligated to do so under any agreement.