Before a Carvel Shoppe opens, are franchisees bound by confidentiality restrictions?
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 bound by confidentiality restrictions even before their Shoppe opens. Carvel considers both "Confidential Information" and "Trade Secrets" as proprietary and protects them. Trade Secrets include the composition of proprietary goods, recipes, advertising strategies, and marketing analyses. Confidential Information includes items such as the Standards and Manuals, pricing information, franchise network materials, Shoppe designs, recipes, supply source information, training materials, marketing plans, and the Franchise Agreement itself.
Carvel explicitly states that franchisees may never reveal any Confidential Information or Trade Secrets to another person or use it for any other person or business during the term of the Franchise Agreement, any renewal term, or even after the Franchise Agreement expires or is terminated. Franchisees also cannot copy or give this information to a third party unless authorized by Carvel.
This restriction is in place even before the Shoppe opens because franchisees receive valuable information and training about the Carvel system and the operation of the Shoppe prior to commencement of operations. Carvel also requires franchisees to ensure that all employees with access to Confidential Information and Trade Secrets are aware of these confidentiality restrictions and are bound by an agreement at least as restrictive as the terms of the Franchise Agreement. This is a common practice in franchising, as franchisors need to protect their proprietary information to maintain a competitive advantage and the integrity of the brand.