Under what circumstances is a Hardees franchisee permitted to disclose Confidential Information according to the franchise agreement?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall protect the Confidential Information as trade secrets of CKR, PAR Brink and CrunchTime. Franchisee agrees that it shall not, without the written permission of CKR, PAR Brink and CrunchTime: (a) modify any Confidential Information; (b) reverse engineer, decompile, decrypt or disassemble the Confidential Information or attempt to do so; (c) transfer, rent, lease, lend or sublicense any Confidential Information to anyone for any purpose; or (d) reveal or disclose any Confidential Information for any purpose to any other person, firm, corporation or other entity, other than Franchisee's employees with a need to know that Confidential Information, to perform employment responsibilities consistent with Franchisee's rights under this Agreement. Franchisee shall safeguard and protect the Confidential Information from theft, piracy or unauthorized access in a manner at least consistent with the protections Franchisee uses to protect its own most confidential information. Franchisee shall inform its employees of their obligations under this Agreement and shall take those steps as may be reasonable in the circumstances, or as may be reasonably requested by CKR, PAR Brink and CrunchTime, to prevent any unauthorized disclosure, copying or use of the Confidential Information.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, a franchisee is permitted to disclose Confidential Information under specific circumstances. Hardees allows franchisees to reveal or disclose confidential information to their employees who need to know the information to perform their job responsibilities, provided these responsibilities are consistent with the franchisee's rights under the franchise agreement.
However, this disclosure is conditional. The franchisee must ensure that employees are informed of their obligations to maintain confidentiality. Furthermore, the franchisee must take reasonable steps, which may be requested by CKR, PAR Brink and CrunchTime, to prevent any unauthorized disclosure, copying, or use of the confidential information. This includes safeguarding the information from theft, piracy, or unauthorized access, using protection measures at least as stringent as those used to protect the franchisee's own confidential information.
In practical terms, a Hardees franchisee must implement a system to manage and protect confidential information. This system should include informing employees about the confidential nature of the information and securing their commitment to maintain its secrecy. Hardees also retains the right to request that employees sign a Confidential Disclosure Agreement. Failure to comply with these confidentiality obligations or unauthorized disclosure of confidential information requires the franchisee to immediately notify CKR and cooperate to regain possession of the information and prevent further unauthorized use or disclosure.
This is a fairly standard clause in franchise agreements, as franchisors need to protect their proprietary information while still allowing franchisees to operate their businesses effectively. Prospective Hardees franchisees should carefully review the definition of "Confidential Information" in the franchise agreement to fully understand the scope of these obligations.