Under what circumstances is a party receiving confidential information permitted to disclose it according to the Carls franchise agreement?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
A. Applicant and Other Individuals may use the Confidential Information solely for the purposes of evaluating whether or not to pursue a franchise opportunity with CJR and for participating in the Training Programs. Except as expressly authorized by CJR in writing, Applicant and Other Individuals agree to maintain all Confidential Information in strict confidence and not to use, or permit others to use, Confidential Information for any other purpose. Applicant will not disclose any Confidential Information to anyone other than Applicant's employees and/or third parties authorized by CJR to receive Confidential
Information, each of whom: (1) has a reasonable need to know the Confidential Information in connection with the evaluation of the franchise opportunity; (2) has been advised of the confidential nature of the Confidential Information; and (3) if requested by CJR, has signed an agreement, in a form satisfactory to CJR, obligating the employee or third party to comply with all the provisions of this Agreement. The obligations of non-use and non-disclosure with respect to particular items of Confidential Information will remain in effect indefinitely.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, an applicant or other individuals may use confidential information solely to evaluate a franchise opportunity with CJR and to participate in training programs. However, they must maintain all confidential information in strict confidence, and cannot allow others to use it for any other purpose unless expressly authorized in writing by CJR.
Carls permits disclosure of confidential information to an applicant's employees and/or third parties authorized by CJR, provided that these individuals have a reasonable need to know the information to evaluate the franchise opportunity, have been advised of its confidential nature, and, if requested by CJR, have signed an agreement to comply with all confidentiality provisions.
For a prospective Carls franchisee, this means that while you are exploring the franchise opportunity, you can share confidential information with your employees, advisors, or other representatives, but only if they need to know the information, are aware of its confidential nature, and agree to keep it confidential. Carls retains the right to require these individuals to sign a confidentiality agreement. These obligations to protect confidential information remain in effect indefinitely.