After the Hardees franchise agreement terminates, is the franchisee still obligated to keep Hardees' trade secrets confidential?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not, during the term of this Agreement or at any time thereafter, communicate or disclose any trade secrets or confidential or proprietary information or know-how of the System to any unauthorized person, or do or perform, directly or indirectly, any other acts injurious or prejudicial to any of the Proprietary Marks or the System. Any and all information, knowledge, know-how and techniques, including all drawings, materials, equipment, specifications, recipes, techniques and other data that HR or its affiliates designate as confidential shall be deemed confidential for purposes of this Agreement.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Hardees Franchise Disclosure Document, franchisees are obligated to maintain the confidentiality of Hardees' trade secrets even after the franchise agreement terminates. Specifically, the franchise agreement states that the franchisee cannot disclose any trade secrets or confidential information regarding the Hardees system to any unauthorized person, not only during the term of the agreement but also at any time thereafter. This obligation extends to all information, knowledge, know-how, and techniques designated as confidential by Hardees.
This means that even after a franchisee's relationship with Hardees ends, they are legally bound to protect the brand's proprietary information. This includes recipes, operational methods, marketing strategies, and any other data that Hardees considers confidential. The purpose of this clause is to protect Hardees' competitive advantage and prevent former franchisees from using confidential information to benefit a competing business.
For a prospective Hardees franchisee, this highlights the importance of understanding what constitutes confidential information and implementing measures to safeguard it. Franchisees must ensure that their employees are also aware of these confidentiality obligations and have a system in place to prevent unauthorized disclosure. Failure to comply with these confidentiality requirements could result in legal action from Hardees, including potential lawsuits and financial penalties.