For Carls franchisees, what is the effect of the rider on other terms in documents executed in connection with the franchise?
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 FDD, for franchisees residing in or operating a restaurant in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin, a rider is added to the Franchise Disclosure Document that impacts the enforceability of certain agreements. This rider stipulates that no statement, questionnaire, or acknowledgment signed by the franchisee can waive claims under applicable state franchise law, including claims of fraud. It also prevents franchisees from disclaiming reliance on statements made by Carls or anyone acting on their behalf.
This rider explicitly supersedes any conflicting terms in any document executed in connection with the franchise agreement. This means that if any other part of the franchise agreement or related documents contains language that contradicts the protections offered by the rider, the rider's provisions will take precedence.
For a prospective Carls franchisee, this rider offers additional protection by ensuring that their rights under state franchise laws cannot be inadvertently waived through standard paperwork. It also allows franchisees to hold Carls accountable for any statements made during the franchise sales process. Franchisees should carefully review the rider and understand their rights within their specific state.