Is a Carls Jr. franchisee allowed to disclose any part of the System to someone who is not an employee?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not, during the term of this Agreement or at any time thereafter, communicate or disclose any trade secrets or confidential or proprietary information or know-how of the System to any unauthorized person, or do or perform, directly or indirectly, any other acts injurious or prejudicial to any of the Proprietary Marks or the System. Any and all information, knowledge, know-how and techniques, including all drawings, materials, equipment, specifications, recipes, techniques and other data that CJR or its affiliates designate as confidential shall be deemed confidential for purposes of this Agreement.
C. Restrictions
- (1) Franchisee acknowledges and agrees that: (a) pursuant to this Agreement, Franchisee will have access to valuable trade secrets, specialized training and other confidential information from CJR and/or its affiliates regarding the development, operation, product preparation and sales, market and operations research, advertising and marketing plans and strategies, purchasing, sales and marketing methods and techniques of CJR and its affiliates and the System; (b) the know-how regarding the System and the opportunities, associations and experience acquired by Franchisee pursuant to this Agreement are of substantial value; (c) in developing the System, CJR and its affiliates have made substantial investments of time, effort, and money; (d) CJR would be unable adequately to protect the System and its trade secrets and confidential and proprietary information against unauthorized use or disclosure and would be unable adequately to encourage a free exchange of ideas and information among operators of Carl's Jr.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, franchisees are prohibited from disclosing trade secrets, confidential information, or proprietary know-how of the Carls Jr. system to any unauthorized person during the term of the agreement and thereafter. This includes information, knowledge, know-how, and techniques such as drawings, materials, equipment, specifications, recipes, and other data that Carls Jr. designates as confidential. This restriction is in place to protect the competitive advantage of the Carls Jr. system.
Carls Jr. franchisees acknowledge that they will have access to valuable trade secrets, specialized training, and confidential information regarding the development, operation, product preparation, sales, market and operations research, advertising and marketing plans, purchasing, and sales and marketing methods of Carls Jr. and its affiliates. The FDD emphasizes that the know-how of the Carls Jr. system and the experience acquired by the franchisee are of substantial value, and that Carls Jr. has invested significant time, effort, and money in developing the system.
The restrictions on disclosing confidential information are crucial for Carls Jr. to protect its system and trade secrets from unauthorized use. Allowing franchisees to disclose such information would hinder the free exchange of ideas and information among operators and undermine the investments made by Carls Jr. in developing the system. This confidentiality clause ensures that the Carls Jr. system maintains its integrity and competitive edge in the quick-service restaurant market.