For Carls franchisees in Applicable Franchise Registration States, what effect does a signed statement have on waiving claims under state franchise law?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
The following language is hereby added to the Franchise Disclosure Document if you are a resident of one of the states listed in the heading of this Rider (the "Applicable Franchise Registration State") or a non-resident who is acquiring franchise rights permitting the location of one or more Carl's Jr. Restaurants in the Applicable Franchise Registration State:
"No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise."
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to the 2024 Carls Franchise Disclosure Document, in certain states, any statement signed by a franchisee related to the franchise commencement cannot waive claims under state franchise law. This includes claims of fraud. Additionally, franchisees cannot disclaim reliance on statements made by Carls or anyone acting on their behalf. This provision overrides any conflicting terms in any document related to the franchise agreement.
This protection applies specifically to franchisees who are residents of or are opening a Carls Jr. restaurant in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin. These states are designated as "Applicable Franchise Registration States" within the context of this specific clause.
This addendum ensures that Carls franchisees in these states retain their rights under state franchise laws, preventing them from inadvertently waiving these rights through standard contractual language. This is particularly relevant in states with strong franchise protection laws, as it reinforces the franchisee's ability to pursue legal remedies if they believe they have been misled or defrauded by Carls.