Does the Hardees franchise agreement allow a franchisee to disclose any part of the Hardees system to someone who is not an employee?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges and agrees that: (1) HR owns all right, title and interest in and to the System; (2) the System includes trade secrets and confidential and proprietary information and know-how that gives HR a competitive advantage; (3) the trade secrets and confidential and proprietary information and know-how derive independent economic value to HR from not being generally known to and not readily ascertainable by others; (4) HR 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;
- 2. I agree not to make any use of the Confidential Information, not to make any copies of the Confidential Information and not to reveal any of the Confidential Information to any person who has not signed a Confidentiality Agreement with HR. In the event I want to disclose the Confidential Information to my partners, employees, advisors or other representatives, I will ensure that such partner, employee, advisor or other representative: (A) has a reasonable need to know the Confidential Information in connection with the evaluation of the franchise opportunity; and (B) has been advised of the confidential nature of the Confidential Information and has agreed to maintain the confidential nature.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, franchisees are generally prohibited from disclosing any part of the Hardees system to individuals who are not employees. The FDD emphasizes that the Hardees system contains trade secrets and confidential information that gives Hardees a competitive advantage.
However, the FDD also outlines a specific exception. Franchisees can disclose confidential information to partners, advisors, or other representatives if those individuals have a reasonable need to know the information for evaluating the franchise opportunity, and if they agree to maintain its confidentiality. This implies that while broad disclosure is prohibited, limited disclosure to certain parties is permissible under specific conditions.
This policy is typical in franchising, as franchisors need to protect their proprietary systems while allowing franchisees to get advice from qualified professionals. A prospective Hardees franchisee should carefully review the confidentiality obligations in the franchise agreement and ensure they have procedures in place to safeguard Hardees's confidential information, including requiring confidentiality agreements from any non-employees who receive access to sensitive information.