In the context of a Carls franchise renewal, what document must CJR and the franchisee execute?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
RENEWAL ADDENDUM TO CARL'S JR. RESTAURANT FRANCHISE AGREEMENT
THIS ADDENDUM to the Carl's Jr. Restaurant Franchise Agreement dated as of ("Franchise Agreement") by and between Carl's Jr. Restaurants LLC ("CJR"), ("Franchisee") and and (collectively "Guarantors") is entered into simultaneously with the Franchise Agreement. RECITALS A. CJR and Franchisee have entered into the Franchise Agreement pursuant to which Franchisee is authorized to continue to operate Carl's Jr. Restaurant No. 110/ ("Franchised Restaurant") located at ("Franchised Location"). B. Franchisee has been operating the Franchised Restaurant at the Franchised Location pursuant to one or more consecutive franchise agreements (collectively, "Prior Agreement"), the Initial Term of which
- C. CJR and Franchisee have executed the Franchise Agreement to renew the Franchise granted to Franchisee pursuant to the Prior Agreement.
- D. Those individuals identified above as "Guarantors," if any, have guaranteed Franchisee's obligations under the Franchise Agreement.
- E. CJR, Franchisee and Guarantors desire to modify certain provisions of the Franchise Agreement as reflected in this Addendum.
AGREEMENT
NOW THEREFORE, in consideration of the covenants and agreements set forth below, the parties agree as follows:
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to the 2024 Carls FDD, in order to renew their franchise agreement, CJR (Carl's Jr. Restaurants LLC) and the franchisee must execute a Renewal Addendum. This addendum modifies certain provisions of the existing franchise agreement. The franchisee must also pay a renewal fee to CJR simultaneously with the execution of the agreement.
The Renewal Addendum becomes an integral part of the franchise agreement, incorporating specific changes and conditions for the renewal term. Franchisees need to carefully review this addendum to understand any modifications to their rights, obligations, and the terms of the franchise. The renewal fee compensates CJR for granting the franchise renewal and is non-refundable.
In addition to the Renewal Addendum, if the franchise location is leased, the franchisee may need to provide CJR with a copy of the fully-executed lease or sublease, along with any amendments. If the lease does not contain the language required by CJR, the franchisee must obtain the landlord's signature on CJR's Lease Addendum and provide it to CJR within 60 days after the renewal term's commencement. The franchisee must also confirm they have the right to remain in possession of the franchised restaurant for the renewal term.
It is important for prospective Carls franchisees to understand that the Renewal Addendum and associated documents are essential for finalizing the franchise renewal. Franchisees should seek legal counsel to review these documents and ensure they fully understand their rights and obligations during the renewal term.