In the Carls franchise agreement, what is the state of formation for CJR?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
If Franchisee is a corporation, a limited liability company, a partnership or any other type of organization (collectively, "business entity"), Franchisee makes the following representations and warranties: (1) it is duly organized and validly existing under the laws of the state of its formation; (2) it is qualified to do business in the state or states in which the Franchised Restaurant is located; (3) execution of this Agreement and the development and operation of the Franchised Restaurant is permitted by its governing documents; and (4) unless waived in writing by CJR, Franchisee's governing documents shall at all times provide that the activities of Franchisee are limited exclusively to the development and operation of Carl's Jr. Restaurants and other restaurants that are franchised by CJR or its affiliates and that no Transfer (as defined in Section 18) of an ownership interest may be made except in accordance with Section 18.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to the 2024 Carls FDD, if the franchisee is a corporation, limited liability company, partnership, or any other type of organization, the franchisee represents and warrants that it is duly organized and validly existing under the laws of the state of its formation. The FDD does not specify the state of formation for CJR.
While the FDD outlines requirements for the franchisee's organization, it does not disclose the state in which CJR, the franchisor, was formed. This information is typically found in the introductory sections of the FDD or in exhibits related to the franchise agreement.
A prospective Carls franchisee should ask the franchisor directly about CJR's state of formation to gain a better understanding of the franchisor's corporate structure and legal standing.