Besides being responsible for damages, what additional legal recourse does CJR have if a Carls franchisee violates Section 20 of the franchise agreement?

According to the 2024 Carls FDD, in addition to being responsible for damages, CJR is entitled to seek injunctive relief if a franchisee violates the covenants in Section 20 of the franchise agreement. This means that CJR can pursue a court order to stop the franchisee from continuing the violating conduct.

The FDD specifies that a violation of Section 20 will result in immediate and irreparable injury to CJR, and that money damages alone would not be sufficient to compensate for the harm caused by the franchisee's actions. This acknowledgment strengthens CJR's ability to obtain an injunction, as it demonstrates the unique and irreplaceable nature of the harm.

For a prospective Carls franchisee, this means that any breach of the covenants in Section 20 could lead to immediate legal action, potentially forcing them to cease certain activities. Section 20 likely contains critical restrictions related to the brand, operations, and competitive behavior, so franchisees must understand and strictly adhere to these covenants to avoid facing an injunction.