Can CJR request that a Carls Jr. franchisee obtain an executed Confidential Disclosure Agreement from designated employees?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
r omission occurring on or before the date of this Agreement, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, claims for contribution, indemnity and/or subrogation and claims arising out of, or relating to this Agreement and all other agreements between any Releasor and any CJR Releasee, the sale of a franchise to any Releasor, the development of the Franchised Restaurant prior to the date of this Agreement and the development and operation of all other restaurants operated by any Releasor that are or were franchised by CJR or its parents, subsidiaries, affiliates or predecessors. Franchisee (on behalf of Releasors) expressly agrees that fair consideration has been given by CJR for this release and it fully understands that this is a negotiated, complete and final release of all claims. This release does not include a release of claims arising from representations in the Carl's Jr. Franchise Disclosure Document provided to Franchisee in connection with this Agreement or any claims arising under any applicable state or federal franchise laws regulating the offer or sale of the franchise for this Agreement (including without limitation the FTC Rule on Franchising (16 C.F.R. Part 436)).
20. COVENANTS
A. Best Efforts
During the term of this Agreement, Franchisee and the Operating Principal shall devote their fulltime and best efforts to the development, management and operation of the Franchised Restaurant.
B. Confidentiality
Franchisee acknowledges and agrees that: (1) CJR owns all right, title and interest in and to the System; (2) the System includes trade secrets and confidential and proprietary information and know-how that gives CJR a competitiv
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, Carls Jr. has the right to request that franchisees obtain executed Confidential Disclosure Agreements from designated employees. The franchisee acknowledges that the System includes trade secrets and confidential information that provide Carls Jr. with a competitive advantage. Franchisees must have a system in place to ensure that their employees keep this information confidential.
Carls Jr. can request that franchisees obtain a Confidential Disclosure Agreement from those employees designated by Carls Jr. The agreement would be in a form prescribed by Carls Jr. This ensures that employees who have access to sensitive information are legally bound to protect it.
This requirement is designed to protect the proprietary information and trade secrets of the Carls Jr. system. It aligns with standard franchising practices, where franchisors take measures to safeguard their intellectual property and operational methods. Franchisees should be prepared to comply with this requirement and ensure that their employees understand and adhere to the confidentiality terms.