What is a Carls Jr. franchisee obligated to do regarding confidential information and trade secrets?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
advantage; (3) the trade secrets and confidential and proprietary information and know-how derive independent economic value to CJR from not being generally known to and not readily ascertainable by others; (4) CJR has taken all measures appropriate to protect the trade secrets and the confidentiality of the proprietary information and know-how of the System; (5) all material or other information now or hereafter provided or disclosed to Franchisee regarding the System is disclosed in confidence; (6) Franchisee has no right to disclose any part of the System to anyone who is not an employee of Franchisee; (7) Franchisee will disclose to its employees only those parts of the System that an employee needs to know; (8) Franchisee will have a system in place to ensure that its employees keep confidential CJR's trade secrets and confidential and proprietary information, and, if requested by CJR, Franchisee shall obtain from those of its employees designated by CJR an executed Confidential Disclosure Agreement in the form prescribed by CJR; (9) by entering into this Agreement, Franchisee does not acquire any ownership interest in the System; and (10) Franchisee's use or duplication of the System or any part of the System in any other business, or disclosure of any part of the System to others for use or duplication in any other business, would constitute an unfair method of competition, for which CJR would be entitled to all legal and equitable remedies, including injunctive relief, without posting a bond.
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.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, franchisees have several obligations regarding the brand's confidential information and trade secrets. Carls Jr. considers its System, which includes trade secrets, confidential information, and know-how, as its exclusive property. Franchisees acknowledge that this System provides Carls Jr. with a competitive advantage and derives independent economic value from not being generally known or easily ascertainable by others.
Carls Jr. franchisees must maintain the confidentiality of the System. Franchisees cannot disclose any part of the System to anyone who is not an employee. They can only disclose parts of the System to their employees on a need-to-know basis. Franchisees must also implement a system to ensure their employees keep Carls Jr.'s trade secrets and confidential information secure. If requested by Carls Jr., franchisees must obtain executed Confidential Disclosure Agreements from designated employees in a form prescribed by Carls Jr.
Franchisees acknowledge that they do not acquire any ownership interest in the System by entering into the Franchise Agreement. Any unauthorized use or duplication of the System in other businesses or disclosure to others for use in other businesses constitutes unfair competition. Carls Jr. is entitled to legal and equitable remedies, including injunctive relief, without needing to post a bond, in the event of such violations. Franchisees must also not communicate or disclose any trade secrets, confidential or proprietary information or know-how of the System to any unauthorized person, during the term of the Agreement or at any time thereafter. Any information that Carls Jr. designates as confidential is deemed confidential for the purposes of the Franchise Agreement.