During the Due Diligence Period, what rights does Carls have regarding access to the Franchised Restaurant and Location?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
- G. For a period of 30 days after the date of CJR's Purchase Notice ("Due Diligence Period"), CJR shall have the right to conduct such investigations as it deems necessary and appropriate to determine: (1) the ownership, condition and title of the Assets; (2) liens and encumbrances on the Assets; (3) environmental and hazardous substances at or upon the Franchised Location; and (4) the validity of contracts and liabilities inuring to CJR or affecting the Assets, whether contingent or otherwise.
Franchisee will afford CJR and its representatives access to the Franchised Restaurant and the Franchised Location at all reasonable times for the purpose of conducting inspections of the Assets; provided that such access does not unreasonably interfere with Franchisee's operation of the Franchised Restaurant.
- H. During the Due Diligence Period, at its sole option and expense, CJR may (1) cause the title to the Assets that consist of real estate interests ("Real Estate Assets") to be examined by a nationally recognized title company and conduct lien searches as to the other Assets; (2) procure "AS BUILT" surveys of the Real Estate Assets; (3) procure environmental assessments and testing with respect to the Real Estate Assets; and/or (4) inspect the Assets that consist of leasehold improvements, equipment, vehicles, furnishings, fixtures, signs and inventory ("Fixed Assets") to determine if the Fixed Assets are in satisfactory working condition.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, during the Due Diligence Period, Carls has specific rights regarding access to the Franchised Restaurant and its location. For a period of 30 days after the date of Carls's Purchase Notice, Carls has the right to conduct investigations to determine the ownership, condition, and title of the assets, liens and encumbrances on the assets, environmental and hazardous substances at or upon the Franchised Location, and the validity of contracts and liabilities inuring to Carls or affecting the assets.
Carls and its representatives are afforded access to the Franchised Restaurant and the Franchised Location at all reasonable times to conduct inspections of the assets. However, this access should not unreasonably interfere with the franchisee's operation of the restaurant.
Additionally, Carls may, at its sole option and expense, examine the title to real estate assets, conduct lien searches on other assets, procure "AS BUILT" surveys of the Real Estate Assets, procure environmental assessments and testing for the Real Estate Assets, and inspect the Fixed Assets to determine if they are in satisfactory working condition.