What standard of protection must a Carls Jr. franchisee use to safeguard confidential information?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall protect the Confidential Information as trade secrets of CKR, PAR Brink and CrunchTime. Franchisee agrees that it shall not, without the written permission of CKR, PAR Brink and CrunchTime: (a) modify any Confidential Information; (b) reverse engineer, decompile, decrypt or disassemble the Confidential Information or attempt to do so; (c) transfer, rent, lease, lend or sublicense any Confidential Information to anyone for any purpose; or (d) reveal or disclose any Confidential Information for any purpose to any other person, firm, corporation or other entity, other than Franchisee's employees with a need to know that Confidential Information, to perform employment responsibilities consistent with Franchisee's rights under this Agreement. Franchisee shall safeguard and protect the Confidential Information from theft, piracy or unauthorized access in a manner at least consistent with the protections Franchisee uses to protect its own most confidential information. Franchisee shall inform its employees of their obligations under this Agreement and shall take those steps as may be reasonable in the circumstances, or as may be reasonably requested by CKR, PAR Brink and CrunchTime, to prevent any unauthorized disclosure, copying or use of the Confidential Information.
- 4.2 Unauthorized Disclosure. Franchisee shall notify CKR immediately upon discovery of any prohibited use or disclosure of the Confidential Information, or any other breach of these confidentiality obligations by Franchisee, and shall fully cooperate with CKR to help CKR regain possession of the Confidential Information and prevent the further prohibited use or disclosure of the Confidential Information.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a franchisee must protect the Confidential Information as trade secrets of CKR, PAR Brink and CrunchTime. The franchisee is prohibited from modifying, reverse engineering, decompiling, decrypting, disassembling, transferring, renting, leasing, lending, or sublicensing any Confidential Information without written permission. They also cannot reveal or disclose any Confidential Information to anyone except their employees who need to know it to perform their job responsibilities, consistent with the franchisee's rights under the agreement.
The standard of protection that a Carls Jr. franchisee must use is at least consistent with the protections the franchisee uses to protect its own most confidential information. This means the franchisee must safeguard and protect the Confidential Information from theft, piracy, or unauthorized access with at least the same level of care they use for their own sensitive data. Franchisees must also inform their employees of their confidentiality obligations and take reasonable steps to prevent unauthorized disclosure, copying, or use of the Confidential Information.
If a franchisee discovers any prohibited use or disclosure of the Confidential Information or any other breach of confidentiality obligations, they must immediately notify CKR. They are also required to fully cooperate with CKR to help regain possession of the Confidential Information and prevent further prohibited use or disclosure. This highlights the importance Carls Jr. places on protecting its trade secrets and proprietary information, and the responsibility franchisees have in maintaining that confidentiality.