Where can Carls file a lawsuit against a franchisee?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section In Franchise Agreement | Summary |
|---|---|---|
| v. Choice of forum | Section 31.B. | Subject to applicable state law, you can only file suit where our principal offices are located. We may file suit in the jurisdiction where our principal offices are located, where you reside or do business, where the Franchised Restaurant is or was located or where the claim arose. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 61–66)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the company has multiple options regarding where it can file a lawsuit against a franchisee. Specifically, Item 17 outlines the choice of forum in Section 31.B of the Franchise Agreement.
Carls is permitted to file a lawsuit against a franchisee in the jurisdiction where Carls's principal offices are located. Additionally, Carls can file suit in the jurisdiction where the franchisee resides or conducts business. The company can also file suit where the franchised restaurant is or was located, or where the claim giving rise to the lawsuit originated.
It is important to note that these options are subject to applicable state law, which could potentially modify or restrict Carls's ability to choose a forum. This flexibility in choosing a forum provides Carls with strategic advantages in managing legal disputes with franchisees, while franchisees have limited to no options to choose a forum.