What action must a Hardees licensee take immediately upon discovering any prohibited use or disclosure of Confidential Information?

According to Hardees's 2025 Franchise Disclosure Document, a licensee must take immediate action upon discovering any prohibited use or disclosure of confidential information. Specifically, the licensee is required to notify CKR (Carl Karcher Enterprises, the franchisor) immediately. Furthermore, the licensee must fully cooperate with CKR to help them regain possession of the confidential information and prevent any further prohibited use or disclosure. This obligation is part of maintaining the confidentiality and protection of Hardees's trade secrets.

This requirement underscores the importance Hardees places on protecting its confidential information, which includes trade secrets, business methods, and other proprietary data. Franchisees are entrusted with this information and are expected to take proactive steps to safeguard it. The immediate notification requirement ensures that Hardees can take swift action to mitigate any potential damage resulting from unauthorized use or disclosure.

For a prospective Hardees franchisee, this means understanding and adhering to strict confidentiality protocols. It also means having systems in place to monitor and detect any potential breaches. The franchisee must also be prepared to act quickly and decisively in the event of a breach, including cooperating fully with Hardees in any investigation or recovery efforts. Failing to do so could result in legal repercussions and damage to the franchise relationship.

This type of clause is standard in most franchise agreements, as franchisors need to protect their intellectual property and business methods. Franchisees should ensure they have adequate training and procedures in place to comply with these requirements.