For Carls franchisees, does the rider apply to non-residents acquiring franchise rights in an Applicable Franchise Registration State?
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, the rider applies to non-residents who are acquiring franchise rights in an Applicable Franchise Registration State. The rider modifies the Franchise Disclosure Document for individuals who are residents of specific states (California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, Wisconsin) or non-residents acquiring franchise rights in those states.
The rider includes a provision that prevents any statement, questionnaire, or acknowledgment from waiving claims under state franchise law, including fraud in the inducement, or disclaiming reliance on statements made by Carls or its representatives. This ensures that franchisees in these states retain their legal rights and protections, regardless of any agreements they may sign during the franchise commencement.
This addendum is significant for prospective Carls franchisees as it reinforces the protection of their rights under applicable state franchise laws. It prevents Carls from using standardized documents to inadvertently waive a franchisee's legal recourse, particularly concerning misrepresentations or fraud. Franchisees should carefully review this rider and understand their rights within their specific state's legal framework.