What agreements must a Carls franchisee not be in default of to be eligible for renewal?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
- (a) Franchisee shall not be in default under this Agreement or any other agreements between Franchisee and CJR or its affiliates; Franchisee shall not be in default beyond the applicable cure period under any real estate lease, equipment lease or financing instrument relating to the Franchised Restaurant; Franchisee shall not be in default beyond the applicable cure period with any vendor or supplier to the Franchised Restaurant; and, for the 12 months before the date of Franchisee's notice and the 12 months before the expiration of the Initial Term, Franchisee shall not have been in default beyond the applicable cure period under this Agreement or any other agreements between Franchisee and CJR or its affiliates.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, a franchisee must not be in default of certain agreements to be eligible for renewal. Specifically, the franchisee must not be in default under the current franchise agreement or any other agreements between the franchisee and CJR (Carls Jr. Restaurants LLC) or its affiliates.
Furthermore, the franchisee must not be in default beyond any applicable cure period under any real estate lease, equipment lease, or financing instrument related to the franchised restaurant. The franchisee also cannot be in default beyond the applicable cure period with any vendor or supplier to the franchised restaurant.
Carls also stipulates that for the 12 months before the date of the franchisee's notice of intent to renew and for the 12 months before the expiration of the initial term, the franchisee must not have been in default beyond the applicable cure period under the franchise agreement or any other agreements with CJR or its affiliates. Meeting these conditions is essential for a Carls franchisee to qualify for a renewal term of either 5 or 10 years.