For Carls franchisees, what is the purpose of Exhibit K in the FDD?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
EXHIBIT K
ADDENDA REQUIRED BY CERTAIN STATES
RIDER TO STATE ADDENDUM TO THE CARL'S JR. RESTAURANTS FRANCHISE DISCLOSURE DOCUMENT
FOR THE FOLLOWING STATES ONLY: CALIFORNIA, HAWAII, ILLINOIS, INDIANA, MARYLAND, MICHIGAN, MINNESOTA, NEW YORK, NORTH DAKOTA, RHODE ISLAND, SOUTH DAKOTA, VIRGINIA, WASHINGTON, WISCONSIN
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."
ADDITIONAL DISCLOSURES REQUIRED FOR CALIFORNIA FRANCHISEES
The following information applies to franchises and franchisees subject to the California Franchise Investment Act.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to the 2024 FDD, Exhibit K provides addenda required by certain states for the Carls franchise. Specifically, it includes riders to the Franchise Disclosure Document for franchisees residing in or planning to operate a Carl's Jr. restaurant in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin.
The rider clarifies that no agreement signed by the franchisee can waive claims under state franchise law, including fraud, or disclaim reliance on statements made by Carls or its representatives. This provision takes precedence over any conflicting terms in other documents related to the franchise agreement.
For California franchisees, Exhibit K includes additional disclosures required by the California Franchise Investment Act. This ensures that Carls complies with specific state regulations and provides necessary information to potential franchisees in those states, offering additional protection and transparency.