For Carls franchisees, what is the scope of the waiver prohibition in the rider?
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 FDD, the Rider to the State Addendum for Carls's franchise agreement specifies that no statement, questionnaire, or acknowledgment signed by a franchisee at the start of the franchise relationship can waive claims under applicable state franchise law, including claims of fraud in the inducement.
This also means that franchisees cannot disclaim reliance on statements made by Carls, its franchise sellers, or anyone acting on Carls's behalf. This provision is designed to protect franchisees from unknowingly giving up their legal rights or being bound by disclaimers regarding information provided during the franchise sales process.
This rider 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. The rider explicitly states that its terms supersede any conflicting terms in any document executed in connection with the franchise agreement, reinforcing the protection afforded to franchisees in these states.