If the Carls Developer is an individual or a partnership of individuals, what is each individual bound by regarding the Franchise Agreement?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
If Developer is an individual, or a partnership comprised solely of individuals, Developer makes the following additional representations and warranties: (A) each individual has executed this Agreement; (B) each individual shall be jointly and severally bound by, and personally liable for the timely and complete performance and a breach of, each and every provision of this Agreement; and (C) notwithstanding any transfer for convenience of ownership, pursuant to Section 10.D., each individual shall continue to be jointly and severally bound by, and personally liable for the timely and complete performance and a breach of, each and every provision of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, if the Developer is an individual or a partnership of individuals, specific conditions apply to each person involved. Each individual must execute the Development Agreement, signifying their understanding and acceptance of its terms.
Furthermore, each individual is jointly and severally bound by the agreement. This means that each person is fully responsible for the timely and complete performance of all provisions within the Development Agreement. If there is a breach of the agreement, each individual is personally liable. This arrangement ensures that Carls can seek recourse from any or all of the individuals in the partnership, rather than being limited to pursuing the partnership as a whole.
Even if there is a transfer of ownership for convenience, each individual remains jointly and severally bound by, and personally liable for, the performance and any breach of every provision in the Development Agreement. This clause is designed to protect Carls's interests by ensuring continued accountability regardless of internal ownership changes within the developer entity.