From the date of Carls' Purchase Notice until Closing, what is the franchisee required to do regarding the operation of the Franchised Restaurant?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
From the date of CJR's Purchase Notice until Closing:
(1) Franchisee shall operate the Franchised Restaurant and maintain the Assets in the usual and ordinary course of business and maintain in full force all insurance policies required under this Agreement; and
(2) CJR shall have the right to appoint a manager, at CJR's expense, to control the day-to-day operations of the Franchised Restaurant and Franchisee shall cooperate, and instruct its employees to cooperate, with the manager appointed by CJR.
Alternatively, CJR may require Franchisee to close the Franchised Restaurant during such time period without removing any Assets from the Franchised Restaurant.
The Purchase Price shall be paid in cash or cash equivalents at the closing of the purchase ("Closing"), which shall take place no later than 60 days after the date of CJR's Purchase Notice.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to Carls' 2024 Franchise Disclosure Document, from the date of CJR's Purchase Notice until the Closing, the franchisee must operate the Franchised Restaurant and maintain the Assets in the usual and ordinary course of business. They must also maintain all insurance policies required under the Franchise Agreement.
Carls also has the right to appoint a manager, at their expense, to control the day-to-day operations of the Franchised Restaurant. In this case, the franchisee is required to cooperate and instruct its employees to cooperate with the manager appointed by Carls.
Alternatively, Carls may require the franchisee to close the Franchised Restaurant during this period without removing any Assets from the Franchised Restaurant. The Closing will take place no later than 60 days after the date of CJR's Purchase Notice.