Is a Carvel franchisee allowed to disclose Confidential Information or Trade Secrets after the Franchise Agreement expires?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
You may never, during the term of the Franchise Agreement, any renewal term of the Franchise Agreement, or after the Franchise Agreement expires or is terminated, reveal any of our Confidential Information or Trade Secrets to another person or use it for any other person or business. You may not copy any of our Confidential Information or Trade Secrets or give it to a third party except as we authorize. These restrictions must be followed even before you open your Shoppe, since you will receive valuable information and training about the System and the operation of the Shoppe before you begin operations.
You will require that all persons employed in your Shoppe having access to Confidential Information and Trade Secrets are aware of the confidentiality restrictions set forth in the Franchise Agreement and similarly bind them not to disclose the Confidential Information and Trade Secrets by an agreement at least as restrictive as the terms of the Franchise Agreement.
Source: Item 14 — Patents, Copyrights, and Proprietary Information (FDD pages 81–82)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, franchisees are strictly prohibited from disclosing Confidential Information or Trade Secrets, not only during the term and any renewal terms of the Franchise Agreement but also after the agreement expires or is terminated. This restriction is a perpetual obligation, ensuring the protection of Carvel's proprietary assets. The FDD defines "Trade Secrets" as information that holds independent economic value due to its confidentiality and includes elements such as the composition of proprietary goods, recipes, advertising strategies, and marketing analyses.
This obligation extends to preventing the franchisee from using the Confidential Information or Trade Secrets for any other person or business. Franchisees are also barred from copying or providing this information to any third party unless explicitly authorized by Carvel. This stringent control is in place from the moment a franchisee receives valuable information and training about the Carvel system, even before the Shoppe begins operations.
Furthermore, Carvel requires franchisees to ensure that all employees with access to Confidential Information and Trade Secrets are aware of and bound by confidentiality restrictions at least as restrictive as those in the Franchise Agreement. This measure aims to prevent unauthorized disclosure by anyone working within the Carvel franchise. This is a common practice in franchising to protect the brand's competitive advantage and proprietary knowledge.